Latest News | Question of Change in Stance on Interest Rate Quite Premature Given Present Level of Inflation: RBI Governor
Get latest articles and stories on Latest News at LatestLY. Reserve Bank Governor Shaktikanta Das on Thursday said the question of change of stance on interest rate is quite premature given the gap between current inflation and 4 per cent target.
New Delhi, Jul 11 (PTI) Reserve Bank Governor Shaktikanta Das on Thursday said the question of change of stance on interest rate is quite premature given the gap between current inflation and 4 per cent target.
"Given gap between current inflation and 4 per cent target, question of change of stance is quite premature...when we move towards 4 per cent CPI (retail inflation) on a sustained basis is when we will get the confidence to think about a change in stance," Das said in an interview to CNBC-TV 18.
He said inflation journey is progressing as per expectations, but added that it is the last mile of the journey towards 4 per cent, which will be the most difficult or sticky.
Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4, RBI had said in its June bi-monthly report.
The Reserve Bank, which has been mandated to ensure inflation remains at 4 per cent (with margin of 2 per cent on either side), mainly factors in CPI while arriving at its monetary policy.
He had said headline inflation softened further during March-April, though persisting food inflation pressures offset the gains of disinflation in core and deflation in the fuel groups.
Despite some moderation, pulses and vegetables inflation remained firmly in double digits.
Vegetable prices are experiencing a summer uptick following a shallow winter season correction. The deflationary trend in fuel was driven primarily by the LPG price cuts in early March.
Core inflation softened for the 11th consecutive month since June 2023. Services inflation moderated to a historic low and goods inflation remained contained.
With regard to GDP, Das said many drivers of growth are playing out their role and momentum of growth was very strong in fourth quarter of last financial year which continues to be strong in the first quarter.
The June policy also revised upwards the GDP growth projection for the current fiscal to 7.2 per cent from 7 per cent on rising private consumption and revival of demand in rural areas.
When the projected GDP growth of 7.2 per cent for 2024-25 materialises, it will be the fourth consecutive year with growth at or above 7 per cent.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)