: Inflation ‘unacceptably and uncomfortably’ high: Paper #FinanceIndia #StockMarketNEWS #Business RBI Governor states that policy measures to remain calibrated, measured Mumbai: With the

@StockMarketNEWS Mon 22 Aug, 2022

Posted in: #FinanceIndia #StockMarketNEWS #Business

Inflation ‘unacceptably and uncomfortably’ high: Paper #FinanceIndia #StockMarketNEWS #Business
RBI Governor states that policy measures to remain calibrated, measured

Mumbai: With the price situation remaining at “unacceptably and uncomfortably??? high level, members of the RBI’s Monetary Policy Committee underlined the need for preventing upward drift of inflation and bringing it down to the target band, as per minutes of its recent

policy meeting.

Reserve Bank Governor Shaktikanta Das said the policy actions of the central bank “would continue to be calibrated, measured and nimble depending upon the unfolding dynamics of inflation and economic activity. ???

Das, according to the minutes of the MPC meeting released on Friday, said retail inflation was “unacceptably and uncomfortably??? high, as he along with other members proposed a 50 basis points hike in repo rate at the last policy review with a view to preventing its upward drift from the target.

The sequence of policy measures, Das said, “is expected to strengthen monetary policy credibility and anchor inflation expectations. Our actions would continue to be calibrated, measured and nimble depending upon the unfolding dynamics of inflation and

economic activity. ???

Frontloading of monetary policy actions, opined RBI Deputy Governor Michael Debabrata Patra, “can keep inflation expectations firmly anchored, re-align inflation with the target and reduce the medium-term growth sacrifice as it is timed into the recovery underway. ???

The CPI inflation was at 7. 01% in June and eased to 6. 71% in July. The data for August is scheduled to be released by the National Statistical Office (NSO) on September 12.

Governor Das further said the RBI’s measures are tailored towards first bringing the CPI inflation within the target band and then taking it close to the target of 4% over the medium term, while supporting growth.

“We will continue with ‘whatever it takes’ approach, given the new set of challenges and very high uncertainties that we are confronted with,??? he added.

Patra also stressed that at the current juncture, shocks are large and recurring. Combined with the rebound in spending liberated from the pandemic, they carry the risk of un-anchoring inflation expectations, he opined.

On exchange rate, he said the elephant in the room is the unrelenting strength of the US dollar, which has risen by over 8. 3% since March 31, 2022.

The Deputy Governor noted that during the financial year 2022-23 (up to August 3), the Indian rupee has fallen by 3. 9% against the US dollar 4. 4 percentage points less than the MSCI advanced economy currency index and 1. 3 percentage points less than the MSCI EME currency index (5.