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RBI Emphasises Price Stability Amid India's Strong Growth Momentum

Updated: Apr 20, 2024 02:41:57pm

RBI Emphasises Price Stability Amid India's Strong Growth Momentum

New Delhi, Apr 20 (KNN) India's robust economic growth is providing the Reserve Bank of India (RBI) with the policy space to unwaveringly focus on price stability, which will help lay the foundation for a period of high growth, according to RBI Governor Shaktikanta Das.

In the minutes of the April monetary policy meeting released on Friday, Das stated, "The strong growth momentum, together with our GDP projections for 2024-25, give us the policy space to unwaveringly focus on price stability."

He highlighted, "Price stability is our mandated goal, and it sets strong foundations for a period of high growth."

Das added, "Accordingly, I vote to keep the policy repo rate unchanged and continue with the focus on withdrawal of accommodation."

The majority of the RBI's rate-setting panel, the Monetary Policy Committee (MPC), expressed caution about upside risks to inflation, particularly emanating from uncertainties in food prices, during the policy review.

On April 5, the MPC kept the policy repo rate, the rate at which the central bank lends to banks, unchanged at 6.5 per cent for the seventh consecutive time and continued its withdrawal of accommodation stance.

Michael Debabrata Patra, Deputy Governor of the RBI, said that recent inflation prints and high-frequency data on salient food prices indicate that food inflation risks remain elevated. He added that headline inflation could be expected to remain in the upper reaches of the tolerance band until favourable base effects come into play in the second quarter of 2024-25.

Patra emphasised the need to commit to enduringly aligning inflation with the target of 4 percent, stating, "Stabilising inflation expectations is progressing, as reflected in forward-looking surveys; anchoring them is crucial for achieving the inflation target."

(KNN Bureau)


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