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Expressing need to take measures to limit the spillover of the price shocks to the rest of the economy, RBI Monetary Policy Committee (MPC) member Shashanka Bhide has said that the high inflation rate in the last three quarters is mainly a consequence of the exogenous price shocks, and addressing the issue will require coordinated policy effort, monetary policy and other economic policies.

RBI MPC member further said the inflationary pressures are high and it certainly is a test for India's inflation targeting framework. He also noted that the high inflation rate in Q2 FY2022-23 follows high inflation in the previous two quarters, adding that high fuel and food prices and their spillover to other sectors have sustained the high inflation rate.

Besides, Bhide said that the present global macroeconomic environment is challenging in terms of inflationary pressures and growth, but with its diverse economic base and prudent policies, India should be able to meet these challenges. Bhide also said the monetary policy tightening by the RBI aims to bring down the inflationary pressures as high inflation adversely affects consumption and investment demand.