RBI Governor Shaktikanta Das Expects Retail Inflation To Decline In September

The governor noted that government's decision to impose restrictions on non-basmati rice export, and reducing the price of cooking gas cylinders, will help push retail inflation down in September.

Das noted that India remains among the fastest-growing major economies worldwide, in spite of the global challenges, while robust regulatory measures have ensured the stability of Indian banks.

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The central bank of India estimates retail inflation to start decreasing in September. The Reserve Bank of India Governor Shaktikanta Das said on Friday that on account of the government’s latest efforts, retail inflation is expected to be on a downward trend in the month. 

Speaking at a programme organised in Indore to interact with the local students, the RBI Governor pointed out that recent measures taken by the government including imposing restrictions on the export of non-basmati rice, keeping a tab on prices of vegetables like tomato, and reducing the price of cooking gas cylinders, will help push retail inflation down in September, reported PTI.

Explaining the inflation curve, the Governor said that although August will report the inflation rate on the higher end, the RBI expects ‘inflation to start coming down from September’. Further, with the decreasing tomato prices, Das noted that retail prices of other vegetables are expected to follow in the month. 

He added, “According to government data, retail inflation rose to a 15-month high of 7.44 per cent in July. In July, (retail) inflation was at a very high level. This surprised everyone. But mainly due to high prices of tomatoes and other vegetables, we were expecting it to remain high in July.”

Das noted that India remains among the fastest-growing major economies worldwide, in spite of the global challenges, while robust regulatory measures have ensured the stability of Indian banks. The Governor urged the domestic financial institutions to stay cautious. He added, “You must have seen the failure of some banks in the US recently and big banks like Credit Suisse in Switzerland. But this global turmoil had no impact on India.”

Talking about the growth of the digital payment sector, Das noted that the number of transactions done through UPI crossed the 10 billion mark in the country in August. He further noted that measures are being taken to promote payments through feature phones to ensure that people residing in remote areas without smartphones also have access to digital payment infrastructure.