India’s central bank needs to see a sustained easing in inflation to the 4% midpoint of its target band, Governor Shaktikanta Das said.
(Bloomberg) — India’s central bank needs to see a sustained easing in inflation to the 4% midpoint of its target band, Governor Shaktikanta Das said.
The Reserve Bank of India remains extra vigilant about evolving inflation dynamics and is completely focused on tackling it, Das said at an event in New Delhi on Friday. Monetary policy must remain active to ensure that the ongoing disinflation process progresses smoothly, he said.
Other key points from his speech:
- RBI seeing progress in anchoring inflation expectations
- India’s food inflation outlook beset with uncertainty
- RBI yet to analyze the impact of crop support price hikes on inflation
- Economic activity in India is displaying resilience
- Uncertainties in global economy have become more pronounced
- The spike in bond yields have wider implications for the global economy
- Several factors, including a stronger dollar, are behind the depreciation in the rupee. The RBI intervenes in the forex market only to tackle excess volatility
- Banks should build buffers and complete repairs if any
- On the withdrawal of 2,000-rupee currency notes, Das said about 100 billion rupees ($1.2 billion) worth of the highest denomination currency has yet to come back to the central bank
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