Monetary policy must remain extra alert to ensure economic stability: RBI Governor
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Reserve Bank of India (RBI) Governor Shaktikanta Das said that monetary policy has to remain extra alert to be ready to act as and when warranted to preserve the hard earned macroeconomic stability. He said the fundamental goal of the monetary policy is to align inflation with the 4 per cent target and anchor inflation expectations.
Das had cautioned that recurring incidences of large and overlapping supply side shocks bring with them the risks of generalisation of inflation impulses, possible loss of monetary policy credibility and de-anchoring of inflation expectations.
The Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) in its last meeting has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent, for the fourth time in a row, in a bid to keep retail inflation under check.
