Global Uncertainty Complicates Fight Against Inflation: RBI MPC Minutes

The persevering with international uncertainity has difficult the combat towards inflation, opined Reserve Bank Deputy Governor Michael Debabrata Patra throughout the Monetary Policy Committee assembly held on February 8.

According to the minutes of the MPC assembly launched on Wednesday, RBI Governor Shaktikanta Das additionally talked about that there’s appreciable uncertainty as a result of a bunch of world components equivalent to rising non-oil commodity costs.

The RBI on February 8 hiked the important thing short-term lending fee by 25 foundation factors to six.5 per cent, citing sticky core inflation. It was the sixth rate of interest hike by the Reserve Bank of India (RBI) since May final yr, taking the entire quantum of improve to 250 foundation factors.

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“The combat towards inflation is difficult by the worldwide outlook. There is a few consensus rising round a milder slowdown than earlier feared, though geographical disparities complicate the prognosis. Be that as it might, the outlook for international inflation is popping extra unsure than earlier than,” Patra opined as per minutes of the Monetary Policy Committee (MPC).

Das, who heads the six-member MPC, also said overall, there is considerable uncertainty at this stage on the evolving inflation trajectory due to ongoing geopolitical tensions, global financial market volatility, rising non-oil commodity prices, volatile crude oil prices and also weather-related events.

He also said 25 basis points rate increase provides space to calibrate future monetary policy actions and stance based on evolving macroeconomic conditions.

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