Ajit Ranade: Inflation control holds primacy as an objective for RBI
4 weeks ago

Ajit Ranade: Inflation control holds primacy as an objective for RBI

Live Mint  

Not too long ago, a governor of the Reserve Bank of India said that his main job was to protect the value of your money. In this policy framework, called flexible inflation targeting, RBI had a mandate and a numerical target of an inflation band given by the government. And should not the numerical target of inflation exclude food and fuel items since their prices are volatile and beyond the control of RBI actions? Multiple mandates of also ensuring high growth and employment, or fast credit growth, a stable exchange rate and lately overall financial stability are all add-ons, and not all central banks sign on to these. Stable inflation with changing relative prices perform an important signalling role, guiding the flow of private investment in augmenting supply capacity toward sectors that exhibit higher demand and stronger relative prices.

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History of this topic

DC Edit | Will RBI tweak inflation focus?
1 week, 6 days ago

DC Edit | Will RBI tweak inflation focus?

Deccan Chronicle  

The appointment of Sanjay Malhotra as the new RBI governor continues the long-standing tradition of IAS officers heading the Central bank, a quasi-autonomous body that decides the country’s monetary policy. Mr Malhotra took over the charge of RBI from Shaktikanta Das — the second longest serving governor after Sir Benegal Rama Rau’s stint of seven years and 197 days — …

​Staying the course: On the RBI and inflation
Trending News
2 weeks, 3 days ago

​Staying the course: On the RBI and inflation

The Hindu  

The Reserve Bank of India’s Monetary Policy Committee, in its latest bi-monthly review, has decided to maintain status quo on the benchmark interest rate of 6.50% for the eleventh consecutive time. India’s retail inflation, after trending below the median 4% target, for the first time in five years, for two months, spiked over September and October, with food prices leading …

India’s central bank should adhere to its inflation-targeting mandate
Trending News
1 month ago

India’s central bank should adhere to its inflation-targeting mandate

Live Mint  

Less than four years after the government concluded its review of India’s inflation-targeting regime in April 2021 and opted to keep both its target and nitty-gritty—its target range, indicator, etc—unchanged, its view of inflation targeting seems to be shifting. After commerce and industry minister Piyush Goyal and then finance minister Nirmala Sitharaman called for lower interest rates, on Tuesday chief …

Why hasn’t RBI cut policy rates despite its lack of control over food inflation?
1 month, 2 weeks ago

Why hasn’t RBI cut policy rates despite its lack of control over food inflation?

Live Mint  

With a 8% fall in stock prices from their peak on 26 September, those who make money from the business of selling stocks seem to be getting jittery. Once RBI cuts the repo rate, the hope is that banks will cut the interest rates at which they lend, people and businesses will borrow more and spend more, and this in …

Inflation control: India doing better than advanced economies like US and Germany, says SBI report
3 months, 1 week ago

Inflation control: India doing better than advanced economies like US and Germany, says SBI report

Live Mint  

India has shown a largely successful inflation-targeting regime compared to advanced economies like the United States and Germany, reported ANI, quoting a State Bank of India research report. “India had a largely successful inflation targeting regime, compared to advanced economies like the USA and Germany,” as per the report. The SBI report cited government initiatives, Reserve Bank of India measures, …

‘Abandoning RBI’s inflation target regime could be risky, counterproductive’
4 months ago

‘Abandoning RBI’s inflation target regime could be risky, counterproductive’

The Hindu  

The Reserve Bank of India's inflation targeting regime has worked well and need not be abandoned in favour of a more discretionary regime that could be risky and counterproductive, a new research paper has said. The paper titled 'Inflation Targeting In India: A Further Assessment' said the weight of food-price inflation in the CPI inflation basket should be reduced to …

Can the Reserve Bank of India rein in food inflation?
4 months, 1 week ago

Can the Reserve Bank of India rein in food inflation?

Hindustan Times  

On August 8, the Reserve Bank of India announced that it had kept the benchmark interest rate unchanged at 6.5% after the end of its monetary policy meeting — it marked the ninth straight meeting of the central bank in which it held rates at the same level. The paper - co-written by deputy governor Michael Debabrata Patra - cautioned …

RBI maintains calm against global noise
4 months, 2 weeks ago

RBI maintains calm against global noise

Live Mint  

The Reserve Bank of India’s bi-monthly monetary policy orchestrated on 8th August 2024 ensured that the “elephant” was deep in the forest before changing the policy. The RBI’s Monetary Policy Committee voted with 4:2 to keep the policy repo rate and stance unchanged at 6.50% and “withdrawal of accommodation” respectively. Like last policy, the two of the external MPC members, …

Food prices can’t be overlooked for inflation targeting, says Das
4 months, 2 weeks ago

Food prices can’t be overlooked for inflation targeting, says Das

New Indian Express  

Das clarified that while the Monetary Policy Committee might overlook elevated food inflation if it is deemed temporary, the current situation of sustained high food inflation requires the committee to take it seriously. The Economic Survey, released prior to the Budget, advocated for a revision of the central bank’s inflation targeting framework by excluding food inflation. It argued that India’s …

RBI MPC 2024: RBI can’t ignore food inflation while framing monetary policy: RBI Governor Shaktikanta Das
4 months, 2 weeks ago

RBI MPC 2024: RBI can’t ignore food inflation while framing monetary policy: RBI Governor Shaktikanta Das

The Hindu  

Reserve Bank of India Governor Shaktikanta Das on Thursday said that the central bank can not ignore food inflation while formulating monetary policy. Mr Das said with “high share of food in the consumption basket, food inflation pressures cannot be ignored.” Further, the public at large understands inflation more in terms of food inflation than the other components of headline …

RBI’s battles with inflation
10 months, 2 weeks ago

RBI’s battles with inflation

Hindustan Times  

That the Monetary Policy Committee would not change policy rates or its stance in its February meeting was widely expected. One, Reserve Bank of India seems to believe, perhaps rightly, that the monetary tightening unleashed by it in the last two years — the policy rate has been increased by 250 basis points — has not hurt growth. Despite core …

Path to inclusive growth must be paved by price stability: RBI officials
1 year, 6 months ago

Path to inclusive growth must be paved by price stability: RBI officials

The Hindu  

Taming inflation and anchoring inflation expectations is key to helping revive consumer spending and private capital expenditure and thereby supporting growth, RBI officials wrote in an article in the monthly bulletin released on Friday. This, in turn, is moderating corporate sales and holding back private investment in capacity creation.,” the officials including Deputy Governor Michael Debabrata Patra wrote in ‘State …

RBI holds rates, vows to keep price stability
1 year, 6 months ago

RBI holds rates, vows to keep price stability

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India, on the basis of an assessment of the current and evolving macroeconomic situation, on June 8 decided to keep the policy repo rate under the liquidity adjustment facility unchanged at 6.50% The standing deposit facility rate remains unchanged at 6.25% and the marginal standing facility rate and the Bank Rate …

Why RBI is finding it tough to tame inflation
1 year, 11 months ago

Why RBI is finding it tough to tame inflation

Live Mint  

Even as inflation has crept downwards, the battle against it continues. Inflation remains elevated and persistent across countries as they grapple with food and energy price shocks and shortages…The correction in industrial input prices and supply chain pressures, if sustained, could help ease pressures on output prices; but the pending pass-through of input costs could keep core inflation firm.” Blunt …

How RBI went wrong on inflation
2 years, 1 month ago

How RBI went wrong on inflation

Live Mint  

MUMBAI : Earlier this month, Shaktikanta Das, the governor of the Reserve Bank of India, compared the Indian central bank to Arjuna in the Mahabharata. RBI’s inflation mandate In February 2015, the RBI entered an agreement on the monetary policy framework with the central government. RBI’s monetary policy framework agreement with the government clearly states that the central bank would …

Boxed in: The Hindu Editorial on need for inflation control as top policy priority
2 years, 2 months ago

Boxed in: The Hindu Editorial on need for inflation control as top policy priority

The Hindu  

The Reserve Bank of India’s rate decision on Friday was ultimately inevitable. RBI Governor Shaktikanta Das cited the ‘aggressive monetary policy actions and even more aggressive communication from advanced economy central banks’ as a third shock -- following the pandemic and Russia’s invasion of Ukraine — which he said had thrust the ‘global economy into the eye of a new …

Synchronize policies to counter weak growth and high inflation
2 years, 3 months ago

Synchronize policies to counter weak growth and high inflation

Live Mint  

There is a wide consensus that India’s gross domestic product will grow at 7%-7.5% during 2022-23. Though mainly driven by high food and energy price inflation, high headline inflation also reflects elevated inflation across a wide range of non-food, non-fuel core inflation components. Apart from domestic inflation, RBIs policy stance also takes into account other factors, in particular global supply …

How ideology muddled inflation control in India
2 years, 3 months ago

How ideology muddled inflation control in India

The Hindu  

The Governor of the Reserve Bank of India reportedly stated that the inflation rate would be brought to its target level of 4% within 24 months. Though the characteristics of India’s economy vary substantially when compared to those of the industrialised West, their governments follow the same approach to inflation control, termed ‘inflation targeting’ and implemented by their central banks. …

Tackling Inflation Is RBI's Top Priority, Trying Not To Hurt Growth, Says Shaktikanta Das
2 years, 3 months ago

Tackling Inflation Is RBI's Top Priority, Trying Not To Hurt Growth, Says Shaktikanta Das

News 18  

Reserve Bank of India Governor Shaktikanta Das on Friday said tackling inflation is the central bank’s top priority and the RBI will try to minimise its impact on growth. India’s GDP rose 13.5 per cent in the June 2022 quarter. However, the Q1FY23 growth fell short of the RBI’s projection of 16.2 per cent. The RBI’s Monetary Policy Committee hiked …

RBI Bulletin: India's Inflation Still Elevated, May Need Monetary Policy Response
2 years, 4 months ago

RBI Bulletin: India's Inflation Still Elevated, May Need Monetary Policy Response

ABP News  

India’s inflation may still require a monetary policy response going forward as it remains above the target range even though it has eased in recent months, the Reserve Bank of India said in the monthly bulletin released on Thursday. The RBI said, “Inflation has edged down, but its persistence at elevated levels warrants appropriate policy responses to anchor expectations going …

RBI must revise its inflation target range -- upwards
2 years, 5 months ago

RBI must revise its inflation target range -- upwards

Live Mint  

Last year, the finance ministry and Reserve Bank of India agreed to maintain our inflation target at 4%, with a 2% variation on either side as the tolerance limit, from 1 April 2021 to 31 March 2026. Unless RBI recalibrates the model with new data or rethinks the methodology, it is possible that the current inflation target rate “imparts a …

RBI to remain flexible while aiming to tame inflation: Governor Shaktikanta Das
2 years, 5 months ago

RBI to remain flexible while aiming to tame inflation: Governor Shaktikanta Das

The Hindu  

Reserve Bank of India will continue calibrating policy to preserve and foster macroeconomic stability while bringing down inflation and will remain flexible in its approach, Governor Shaktikanta Das said on Saturday. The global economy is going through an uncertain time and concerns around growth and inflation persist, but the central bank believes that there could be some respite from rising …

Inflation expected to remain higher than RBI tolerance level till Dec, says Shaktikanta Das
2 years, 5 months ago

Inflation expected to remain higher than RBI tolerance level till Dec, says Shaktikanta Das

Firstpost  

The RBI governor said inflation is currently the biggest challenge confronting most economies in the world and the current surge is primarily because of global factors New Delhi: India’s headline inflation is expected to remain higher than the Reserve Bank of India upper tolerance level of six per cent till December 2022, RBI Governor Shaktikanta Das has said. “Until December, …

Why RBI Had to Prioritise Inflation Over Growth Even After Moderate Forecast: Guv Das Explains
2 years, 7 months ago

Why RBI Had to Prioritise Inflation Over Growth Even After Moderate Forecast: Guv Das Explains

News 18  

Following the Russia-Ukraine war in late February that also led to the worsening of the inflation situation in India due to constrained supply, the Reserve Bank of India had to revise upwards its inflation forecast for 2022-23 to 5.7 per cent in the monetary policy review in April, compared with the 4.5 per cent projected in early February. The food …

Retail inflation: The step ahead
2 years, 7 months ago

Retail inflation: The step ahead

Hindustan Times  

Mint Street and North Block must maintain close coordination in making sure that our policy response does not throw the baby out with the bathwater But will a monetary tightening be able to control inflation? That the April inflation number would be higher than the 6.95% reading in March 2022 was a given, especially after the unscheduled rate hike by …

Inflation control needs another model
2 years, 7 months ago

Inflation control needs another model

The Hindu  

Inflation is back as a talking point in the public arena, some would say belatedly, for wholesale price inflation has been in the double digits for over 12 months. It may appear contradictory to ask whether the RBI’s stated policy of ‘inflation targeting’, implemented through changes in the interest rate, can control inflation, but we show here why that would …

This age of inflation
2 years, 8 months ago

This age of inflation

The Hindu  

Reserve Bank of India Governor Shaktikanta Das announced in early April that the central bank will course-correct. Inflation reached a 17-month high of nearly 7% in the month of March, breaching the target level of 4% that the government has set for the RBI, as also the upper tolerance level of 6%. Policy choices What made high inflation stubborn isn’t …

Retail Inflation at 6.01% in January, Hits 7-Month High
2 years, 10 months ago

Retail Inflation at 6.01% in January, Hits 7-Month High

News 18  

India’s retail inflation increased to 6.01 per cent in the month of January, driven by higher consumer goods and telecom prices along with a comparatively low rate a year ago, data released by the Ministry of Statistics and Programme Implementation on Monday indicated. In its recently concluded monetary policy meet, Reserve Bank of India said inflation based on consumer price …

Inflation targeting and the Indian economy
3 years, 5 months ago

Inflation targeting and the Indian economy

Hindustan Times  

In March 2015, Reserve Bank of India officially adopted inflation targeting as the monetary policy framework for the Indian economy. With the definition and motivation of inflation targeting out of the way, let’s now focus on the structure of the Indian economy and what it entails for adopting an inflation targeting framework. The Indian economy has several structural features which …

What RBI policymakers should be mindful of this fiscal
3 years, 8 months ago

What RBI policymakers should be mindful of this fiscal

Live Mint  

Recently, I read a paper, titled Overcoming the Tragedy of Super Wicked Problems: Constraining our Future Selves to Ameliorate Global Climate Change, that presented a framework for tackling climate change. Separately, the authors of the first paper referred to here note that big questions in social science involve contingent and complex causality, and that the search for ‘laws’ and invariant …

The Hindu Explains | What are the implications of the Finance Ministry’s decision for monetary policy?
3 years, 8 months ago

The Hindu Explains | What are the implications of the Finance Ministry’s decision for monetary policy?

The Hindu  

The story so far: On the last day of the financial year 2020-21, the Finance Ministry announced that the inflation target for the five years between April 2021 and March 2026 will remain unchanged at 4%, with an upper tolerance level of 6% and a lower tolerance level of 2%. This is the retail inflation target that will drive the …

RBI favors retaining inflation target regime
3 years, 9 months ago

RBI favors retaining inflation target regime

Hindustan Times  

The Reserve Bank of India favors keeping the current inflation targeting regime unchanged, saying it has been effective in containing price-growth. The current framework is appropriate for the next five years, according to a report from the RBI on Friday, after it reviewed the flexible inflation targeting regime, or FIT, put in place five years ago. While the central bank …

India must not weaken its resolve on inflation
4 years ago

India must not weaken its resolve on inflation

Live Mint  

The Reserve Bank of India’s retail inflation target is scheduled for review once its validity expires early next year. Some would even have us abandon the framework entirely, arguing that rising prices in India need not always reflect excessive money supply, and instead let RBI formulate its monetary policy for a judicious mix of economic aims, as was the case …

The Hindu Explains | What is inflation, and what is the RBI’s role in tackling it?
4 years ago

The Hindu Explains | What is inflation, and what is the RBI’s role in tackling it?

The Hindu  

The story so far: The Monetary Policy Committee of the Reserve Bank of India on Friday announced its decision to hold the benchmark repo rate unchanged at 4%. Vowing to stick with its ‘accommodative’ policy stance in the next fiscal year to help support economic recovery amid the COVID-19 pandemic, the MPC opined that inflation was likely to remain elevated, …

RBI rate-setter sees high inflation throttling policy space
4 years ago

RBI rate-setter sees high inflation throttling policy space

Live Mint  

The Reserve Bank of India has cut interest rates by “a great deal” and more policy space can be created when inflation eases, its executive director and interest rate-panel member Mridul Saggar said. While consumer prices above the RBI’s 2%-6% target band have forced policy makers to pause on rate cuts, a looming recession has compelled the rate-setters to weigh …

Why inflation is rising despite a fall in consumption
4 years, 3 months ago

Why inflation is rising despite a fall in consumption

India Today  

Why has retail inflation remained high despite tepid demand for most products, threatening to further halt the Reserve Bank of India’s rate-cutting spree? Retail inflation, which came in at 6.7 per cent in August, has breached the upper band of the RBI's inflation target for the fifth consecutive month. Inflation in the case of fuel components rose to a 5-month …

Ex RBI Deputy Governor Says Need to Focus on Inflation Over Growth at Next Policy Review Meet
4 years, 4 months ago

Ex RBI Deputy Governor Says Need to Focus on Inflation Over Growth at Next Policy Review Meet

News 18  

Former RBI Deputy Governor Viral Acharya on Saturday said inflation is higher than expected and the rate-setting panel should "respect" its core mandate of controlling price rise at the next week's policy review meet. The comments come even as there is an increased clamour for further rate cuts to aid the economic recovery, even as headline inflation has breached the …

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