New Delhi: While voting for the status quo in interest rate, Reserve Bank of India (RBI) Governor Shaktikanta Das said that the central bank is laser-focused on bringing back the inflation rate to 4 per cent over a period of time in a non-disruptive manner, according to the minutes of the October policy meeting released on Friday.
The government has mandated the central bank to ensure the Consumer Price Index (CPI) based inflation is at 4 per cent, with either side band of 2 per cent. The retail inflation that was above 6 per cent during May and June has begun moving down and stood at 4.35 per cent in September.
According to the minutes of the Monetary Policy Committee (MPC) meeting from October 6 to 8, the RBI Governor said the panel was faced with the challenges posed by headline inflation exceeding the upper tolerance threshold for the second successive month, reported news agency PTI.
Das also noted that the actual inflation outcomes for July-August, with inflation registering a substantial moderation to move within the tolerance band, have vindicated the MPC’s outlook and monetary policy stance.
“Volatile crude oil prices, particularly the resurgence since mid-September, is pushing pump prices to new highs, raising risk of further spillover of high transportation cost into retail prices of goods and services,” the Governor was quoted as saying by the news agency.
The RBI Governor opined that continued monetary support is necessary as the economic recovery process even now is delicately poised and growth is yet to take firmer roots.
At this critical juncture, “our actions have to be gradual, calibrated, well timed and well-telegraphed to avoid any undue surprises,” Das asserted.
Das voted to keep the policy rate unchanged and continue with the accommodative stance. “In parallel, we remain laser-focused to bring back the CPI inflation to 4 per cent over a period of time in a non-disruptive manner,” he said.