Shaktikant Das


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RBI executive director and committee member Rajeev Ranjan said the prolonged geopolitical crisis and rising uncertainties due to no early resolution of the conflict are driving inflation.

Mumbai| All six members of the Monetary Policy Committee (MPC), including Reserve Bank of India (RBI) Governor Shaktikanta Das, have expressed concern over the persistent high inflation and stressed that the central bank’s efforts to contain the rise in prices within the prescribed limits. Is. This information was received from the details of the meeting of the Monetary Policy Committee (MPC) of the central bank released on Wednesday.

RBI’s policy rate setting committee had earlier this month voted in favor of a 0.50 per cent hike in the key policy rate to check rising inflation. This was the second increase in the last five weeks.

Earlier in May also, the repo rate was increased by 0.40 percent. Going by the details of the three-day meeting, the governor said the high rate of inflation remains a cause for concern. But there is a revival in economic activity and it is gaining momentum. The time is opportune for another hike in the policy rate to effectively tackle inflation.

“Accordingly, I will vote for 0.50 per cent hike in the repo rate,” he said. This is in line with the evolving inflation-growth situation and will help mitigate the effects of adverse supply problems.

Das said the increase in the repo rate will strengthen the RBI’s commitment to price stability. The primary goal for the central bank is to keep inflation under check.

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This is a precondition for sustained growth in the medium term. Along with raising the repo rate by 0.50 per cent to 4.9 per cent, the Reserve Bank has also revised its inflation forecast for the current fiscal to 6.7 per cent from 5.7 per cent earlier.

Also MPC member and RBI Deputy Governor Michael Debabrata Patra said that the global inflation crisis is one of the most severe food and energy crises in recent history which now threatens the most vulnerable people across the world. Inflation has risen due to supply chain disruptions amid the Russo-Ukraine war, he said. Monetary policy was used to deal with supply chain conditions and there is no other way to deal with it.

RBI executive director and committee member Rajeev Ranjan said the prolonged geopolitical crisis and rising uncertainties due to no early resolution of the conflict are driving inflation.

Shashank Bhide, an independent member of the committee, said the inflationary pressures that have intensified since March 2022 will continue to be a matter of concern in the fiscal year 2022-23. This situation will remain in place till the time the international supply situation improves rapidly.

While voting for raising the repo rate to 4.9 per cent, MPC member Ashima Goyal said further decisions would depend on the outcome of economic growth and inflation.

Apart from this, another member Jayant R Verma had called for a one percent increase in the repo rate very soon in the MPC meeting in May. He said that his priority was to increase the repo rate by 0.60 percent.

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“However, I have decided to go with the majority approach of 0.50 percentage points for similar reasons,” he said.

The next meeting of the Monetary Policy Committee will now be held from August 2 to 4, 2022.

Disclaimer:Prabhasakshi has not edited this news. This news has been published from PTI-language feed.



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