Premature move on monetary policy front could undermine efforts to check inflation: Shaktikanta Das
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The Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the RBI's job to bring down inflation is not over, and any premature move on the policy front could undermine the success achieved so far on the price situation.
RBI's rate setting panel, Monetary Policy Committee (MPC), had met for three days from February 6-8, 2024. The panel decided to leave the key policy rate unchanged at 6.5 per cent for the sixth time in row. It is almost a year now that the repo rate or short-term borrowing rate is at 6.5 per cent. It was in February 2023 when the RBI hiked the repo rate and has held the policy rate since then.
According to the minutes of the February Monetary Policy Committee (MPC) meeting released by the central bank, Das had said ‘at this juncture, monetary policy must remain vigilant and not assume that our job on the inflation front is over’. He stressed that the MPC must remain committed to successfully navigate the last mile of disinflation that can be sticky.
As per the minutes, the governor said as markets are front-running central banks in anticipation of policy pivots, any premature move may undermine the success achieved so far. He argued that price and financial stability were essential to sustain a long haul of high growth, and the monetary policy's objective was to stay focused on achieving the 4 per cent inflation target on a durable basis, keeping in mind the objective of growth.
