RBI Monetary Policy: Worst Of Inflation Behind Us, But No Room For Complacency, Says Shaktikanta Das
Shaktikanta Das said that from a growth perspective, India stands out as an isle of resilience in a "gloomy world" which is staring at slowing growth with possibilities of recession in some countries
RBI Governor Shaktikanta Das said on Wednesday said that the worst of inflation is behind us. However, he added that there is no room for complacency in the fight against price-rise.
Das in the post-policy review said that from a growth perspective, India stands out as an isle of resilience in a "gloomy world" which is staring at slowing growth with possibilities of recession in some countries.
Earlier in the day, the RBI's rate-setting panel resolved to go for a 35 basis points hike in the key interest rates, taking the cumulative rate hikes to 2.25 per cent since May 2022.
The RBI has been hiking rates because of the high inflation, where the headline number has been above the upper end of the tolerance band for the tenth month running in October.
Das said inflation is cooling across the world on softening of the commodity and the oil prices, but stressed that we cannot be "complacent" despite the positive news on inflation.
RBI Deputy Governor Michael Patra said RBI's efforts will be first focused on getting inflation into the tolerance band of under 6 per cent, and added that the lowering of the quantum of the hikes at 35 basis points as against 50 basis points earlier should be seen as a signal which the central bank is sending out.
"Rate hikes of 50 basis points are over," Patra said.
Das said the RBI will be nimble in its actions and will be focusing on the incoming data and its assessment. He also added that it has acted "proactively and effectively" over the last three years.
He said, “The appreciation of the US dollar this year, which precipitated large-scale depreciation of all major global currencies including the Indian rupee, has drawn wide attention…Through this episode of US dollar appreciation, the rupee’s movements have been the least disruptive, relative to peers. In fact, the rupee has appreciated against all other major currencies except a few.”
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