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 Russia’s war suddenly but the RBI’s policy choices. Inflation is paying for the budget The RBI says it tolerated high inflation to chase the growth mandate but all it has managed to do is lower the cost of borrowing for government — that too at a time when the government’s borrowings have risen to record levels. The RBI staying off the 4% target over such a long period of time, despite its legal mandate, strikes at the core question of why a country like India time and again tolerates high inflation.

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History of this topic

DC Edit | Will RBI tweak inflation focus?
1 week, 5 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 …

RBI must restore balance between inflation, growth
2 weeks, 3 days ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

RBI must restore balance between inflation, growth
2 weeks, 3 days ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

Monetary policy review: RBI should stick to its price stability mandate
2 weeks, 5 days ago

Monetary policy review: RBI should stick to its price stability mandate

Live Mint  

One of the lingering effects of covid—‘long covid’—is that economic growth has begun to look a bit like the Sensex, albeit in slow motion. So, last fiscal year’s growth looked rosy in large part because growth in 2022-23 had flagged since 2021-22, when it was 9.7% but on a covid-shrunken GDP base of 2020-21. As the US Fed and major …

RBI MPC: FX, not inflation, curbing degrees of policy freedom
2 weeks, 6 days ago

RBI MPC: FX, not inflation, curbing degrees of policy freedom

Live Mint  

After the recent GDP shocker, speculation is rife regarding a “policy action" in the December monetary policy meeting. Hence, we believe that in an increasingly volatile world, degrees of freedom for the RBI's monetary policy committee to ease policy to support growth would be constrained more by foreign exchange movements rather than inflation. While bond markets now anticipate rate cuts …

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 …

Inflation behaving more like a magician who tricks you again and again
1 month ago

Inflation behaving more like a magician who tricks you again and again

New Indian Express  

The main culprit is food inflation, which jumped to 10.87%, largely led by vegetable prices that rose by a staggering 42.18% in October. As Deputy governor Michael Patra noted, inflation will likely encounter a hump in the near months largely due to an adverse base and one-off shocks to prices of vegetables, edible oils and gram. The fact that inflation …

'We Still Have Distance To Cover', Says RBI Guv Shaktikanta Das Amid Moderate Inflation
3 months, 1 week ago

'We Still Have Distance To Cover', Says RBI Guv Shaktikanta Das Amid Moderate Inflation

News 18  

Inflation in India has moderated but still, there is a distance to cover, Reserve Bank Governor Shaktikanta Das said on Friday. “Inflation has moderated from its peak of 7.8% in April 2022 into the tolerance band of +/- 2% around the target of 4%, but we still have a distance to cover and cannot afford to look the other way,” …

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 …

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, …

DC Edit | Cautious RBI targets inflation
8 months, 2 weeks ago

DC Edit | Cautious RBI targets inflation

Deccan Chronicle  

The Reserve Bank of India-led Monetary Policy Committee has once again kept the policy repo rate unchanged at 6.5 per cent. Retail inflation hovered around 5.1 per cent during January and February 2024, which is a marginal decline from 5.7 per cent in December 2023. Food inflation — which is the most important focus area for the world’s populous country …

RBI Monetary Policy | MPC holds rate at 6.5% to tame inflation, FY25 real GDP growth projected at 7%, CPI inflation at 4.5%
8 months, 2 weeks ago

RBI Monetary Policy | MPC holds rate at 6.5% to tame inflation, FY25 real GDP growth projected at 7%, CPI inflation at 4.5%

The Hindu  

April 05, 2024 10:08 am | Updated 12:45 pm IST The Monetary Policy Committee on April 5 decided to keep the policy repo rate under the liquidity adjustment facility unchanged at 6.50%. The risks are evenly balanced.” On inflation the Governor said “Two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant …

RBI pegs FY25 growth at 7%, inflation at 4.5%
10 months, 2 weeks ago

RBI pegs FY25 growth at 7%, inflation at 4.5%

Hindustan Times  

The Reserve Bank of India on Thursday decided to keep the policy rate unchanged for the sixth time in a row, citing global uncertainty and the need to bring down retail inflation to 4 %, and said that it expects GDP growth in the next financial year to be at 7%. “Monetary policy must continue to be actively disinflationary to …

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 …

Growth getting stronger foothold, inflation coming under control, says RBI Governor Shaktikanta Das
1 year, 1 month ago

Growth getting stronger foothold, inflation coming under control, says RBI Governor Shaktikanta Das

The Hindu  

Reserve Bank Governor Shaktikanta Das on November 9 said economic growth in India is getting stronger foothold while inflation is also coming under control driven by the inherent dynamism and a prudent policy mix. Driven by its inherent dynamism and supported by a prudent policy mix, growth is getting stronger foothold while inflation is also coming under control," the governor …

RBI MPC Meet Next Week: The Dilemma Between Growth and Inflation
1 year, 2 months ago

RBI MPC Meet Next Week: The Dilemma Between Growth and Inflation

News 18  

Written By Srikanth Subramanian: The RBI MPC is set to come out with its interest rate decision on October 6. Inflation in August remained beyond the RBI’s upper tolerance limit at 6.83 per cent, but significantly lower than its peak of 7.44 per cent in July. Core CPI, excluding food and fuel items, remained largely unchanged at 4.8 per cent …

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 …

RBI holds rates but signals tight monetary policy ahead
1 year, 6 months ago

RBI holds rates but signals tight monetary policy ahead

Hindustan Times  

India's central bank kept its key lending rate steady for a second straight policy meeting on Thursday, as widely expected, but signalled that monetary conditions will remain tight for some time as it looks to further curb inflationary pressures. The RBI maintained its policy stance of "withdrawal of accommodation" to ensure inflation progressively aligns with the committee's target while remaining …

Inflation Momentum Softer Than Anticipated: RBI's State Of The Economy Report
1 year, 7 months ago

Inflation Momentum Softer Than Anticipated: RBI's State Of The Economy Report

ABP News  

The Reserve Bank of India’s State of the Economy report on Monday said that consumer price index-based inflation, which dropped below 5 per cent in April, for the first time since November 2021, demonstrated the central bank’s monetary policy decision. “The CPI inflation print for April 2023 indicates that momentum is turning out to be softer than anticipated on account …

Retail inflation in India comes down by 1% in a month
1 year, 7 months ago

Retail inflation in India comes down by 1% in a month

Op India  

Retail inflation in India eased further in April to 4.7 per cent as against 5.7 per cent the previous month. India’s headline consumer price index-based inflation has gradually declined from its peak of 7.8 per cent in April 2022 to below 6 per cent now, which is below RBI’s upper tolerance band. India’s retail inflation was above RBI’s 6 per …

Inflation expected to come down over the year: RBI MPC member Ashima Goyal
1 year, 9 months ago

Inflation expected to come down over the year: RBI MPC member Ashima Goyal

Deccan Chronicle  

New Delhi: Inflation is expected to come down over the year, RBI Monetary Policy Committee member Ashima Goyal said on Sunday, asserting that the government's supply-side action coordinated with a flexible inflation-targeting regime has kept the rate of price rise lower than that in other countries. "Since nominal policy rates rise with inflation to maintain an expected real positive 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 …

RBI must keep playing it safe
2 years ago

RBI must keep playing it safe

Hindustan Times  

The last three years have shown why fiscal and monetary policy have to remain conservative and nimble, and why policymakers themselves have to be resolute. Last week, the monetary policy committee of the Reserve Bank of India raised the interest rate by 0.35 percentage points to 6.25% and, according to its policy statement, “decided to remain focused on withdrawal of …

The record shows that ‘Arjuna’s eye’ hasn’t quite been on inflation
2 years ago

The record shows that ‘Arjuna’s eye’ hasn’t quite been on inflation

Live Mint  

Casting itself in the role of the skilled archer of the Mahabharata, the Reserve Bank of India has said it has “Arjuna’s eye” on inflation. After the pandemic hit, seeing that India’s recovery was fragile, RBI concluded that inflation was the lesser evil compared to the collapse in growth: India’s GDP contraction was the worst in the world after Peru’s. …

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 …

No need to change inflation target of 2-6%; October print to be lower than 7%: RBI Governor
2 years, 1 month ago

No need to change inflation target of 2-6%; October print to be lower than 7%: RBI Governor

The Hindu  

RBI Governor Shaktikanta Das on November 12 said there was no need to change the inflation target despite the Central bank's failure to keep it below the 6% upper tolerance level for nine consecutive months while exuding confidence that the October print will be less than 7 %. Speaking at the HT Leadership Summit on Saturday, Mr. Das said there …

Missed inflation target, but acting early would have exerted heavy costs: RBI Das
2 years, 1 month ago

Missed inflation target, but acting early would have exerted heavy costs: RBI Das

Deccan Chronicle  

Mumbai: RBI Governor Shaktikanta Das on Wednesday defended the Reserve Bank's handling of the price situation, saying acting prematurely on inflation would have exerted a heavy cost on the economy and citizens. Acknowledging that the inflation target has been missed, Das said the RBI decided to support the economy by not introducing a rate hike in face of a spike …

RBI may need a revised strategy to anchor inflation expectations
2 years, 2 months ago

RBI may need a revised strategy to anchor inflation expectations

Live Mint  

The world is struggling with higher-than-desirable inflation. Household inflation expectations, thus, form a critical piece of information for central banks, especially in periods of high inflation. We compared inflation expectations of urban households over time with the actual consumer inflation in urban areas, starting with 2016, when RBI moved to the current inflation-targeting framework. Whether and how variations in household …

RBI Bulletin: Battle Against Surging Inflation Will Be Dogged, Prolonged
2 years, 2 months ago

RBI Bulletin: Battle Against Surging Inflation Will Be Dogged, Prolonged

ABP News  

The Reserve Bank of India in its article on Monday said that the battle against inflation will be dogged and prolonged, given the long and variable lags with which monetary policy operates. Retail inflation spiked to 7.41 per cent in September, remaining above central bank’s upper tolerance level of 6 per cent for the ninth month in a row. With …

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 …

Why the RBI is unlikely to slow down in curbing inflation
2 years, 2 months ago

Why the RBI is unlikely to slow down in curbing inflation

Live Mint  

Global growth is slowing rapidly, inflation is stubbornly high and central banks in developed nations are hiking interest rates by magnitudes not seen in decades. At other times, new data sources are introduced to make statistics more accurate, particularly to capture India’s informal sector better. Why the wait for new trade policy just got longer Busted: The myth of India …

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, …

RBI raises rates to tame inflation
2 years, 6 months ago

RBI raises rates to tame inflation

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India on Wednesday voted unanimously to increase the repo rate by 50 basis points to 4.90% in a bid to slow inflation that it estimates will average 7.5% in the current April-June quarter. The MPC also decided to remain focused on the withdrawal of accommodation which had been provided to support …

RBI raises inflation forecast to 6.7% for 2022-2023
2 years, 6 months ago

RBI raises inflation forecast to 6.7% for 2022-2023

India TV News  

Highlights RBI today upped inflation projection for current fiscal to 6.7% from 5.7% forecast in April RBI Governor Shaktikanta Das said the upside risk to inflation persists High global crude oil prices would add to the upside pressure on inflation RBI inflation news updates : Reserve Bank of India on Wednesday upped inflation projection for the current fiscal to 6.7 …

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 …

RBI, Govt Taken Steps To Control Inflation; Actions To Have Sobering Impact Soon: Shaktikanta Das
2 years, 7 months ago

RBI, Govt Taken Steps To Control Inflation; Actions To Have Sobering Impact Soon: Shaktikanta Das

News 18  

Amid the prevailing inflationary pressure with the CPI number touching an eight-year high of 7.79 per cent, RBI Governor Shaktikanta Das on Monday said the central bank and the government have taken a number of steps in the past few months to control price rise in the country and the actions will have a sobering impact on inflation going forward. …

On inflation, the government and the RBI are walking a tight rope
2 years, 7 months ago

On inflation, the government and the RBI are walking a tight rope

The Hindu  

The off-cycle meeting of the Monetary Policy Committee on May 2 and May 4 and its decision to raise the repo rate to 4.4% sends a clear signal that the Reserve Bank of India is committed to its mandate of keeping the consumer price index inflation rate at 4% with an upper and lower band of plus or minus 2 …

‘Rate increases may not cool price gains driven by war’
2 years, 7 months ago

‘Rate increases may not cool price gains driven by war’

The Hindu  

The Reserve Bank of India’s interest rate increases may not be able to ‘meaningfully’ cool prices while sacrificing growth, as almost three-fifths of the spike in India’s retail inflation since February can be linked to the Ukraine-Russia conflict, SBI’s economic researchers wrote in a report on Monday. “In a situation of incipient demand recovery post COVID, the question will be …

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 …

Steps taken by RBI and govt to cut duration of high inflation: Finmin report
2 years, 7 months ago

Steps taken by RBI and govt to cut duration of high inflation: Finmin report

India TV News  

Highlights Finance ministry stated that measures taken by the RBI and government will squeeze the duration of Retail inflation has been trending above upper tolerance level of 6% for the past three months RBI in an off-cycle announcement earlier this month hiked the key repo rate The finance ministry on Thursday said measures taken by the RBI and government will …

‘Inflation is the biggest challenge now’
2 years, 7 months ago

‘Inflation is the biggest challenge now’

The Hindu  

Inflation is now the biggest challenge for India’s policy makers rather than the U.S. Federal Reserve’s taper programme and measures like interest rate increases to stem rising prices could dent the fledgling consumption demand recovery from the pandemic not just in India but globally, a senior official said on Wednesday. “The nearly 7% inflation print for March came four days …

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