look news india
Mumbai: Retail inflation for July has come down to 3.50 per cent, lower than the target of 4 per cent, but interest rate cuts cannot be made on the basis of this one-time reduction, Reserve Bank of India (RBI) Governor Shaktikanta Das clarified. The decline seen in July is due to high statistical levels.
In an interview to a TV channel, the Governor said that it would be a mistake to take a decision based on a one-time cut and the Reserve Bank wants inflation to remain below four percent for a long time.
The fall in inflation to 3.50 per cent in July does not mean that the problem is over. The July inflation figure was based on the base effect.
The Reserve Bank has maintained the repo rate at 6.50 per cent since February 2023. Due to high prices of food items, the Reserve Bank is not ready to ease the monetary policy.
He further said, we have to wait a little more, there is still some way to go. We have to reduce inflation. If the prices of food items are removed, then people will lose confidence. The price of food is an important factor in calculating retail inflation.
Inflation is declining and we believe it will reach the target of four percent. However, inflation is expected to average 4.50 percent in the current financial year. This level of perception is due to uncertainty.
Das denied that growth has been impacted as interest rates have remained high for more than a year.
India will be the fastest growing country at the rate of 7.20 percent in the current financial year. Therefore, in our opinion the risk to growth is very low. He also claimed that the growth is stable and sustainable.
