Easing inflation provides room for rate cut: Jaitley

PTI New Delhi | Updated on January 24, 2018 Published on February 28, 2015

Finance Minister Arun Jaitley (C) leaves his office to present the 2015/16 federal budget in New Delhi on Saturday. -- Reuters

Making a case for a rate cut by the RBI, Finance Minister Arun Jaitley today said that retail inflation is expected to remain close to 5 per cent, which allows for further easing of monetary policy.

The Government would soon put in place a monetary policy framework to ensure that inflation remains below 6 per cent, he said.

“To ensure that our victory over inflation is institutionalised and hence continues, we have concluded a monetary policy framework agreement with the Reserve Bank of India. The framework objective is to keep inflation below 6 per cent and we will move to amend the RBI Act this year and provide for monetary policy committee,” Finance Minister said while presenting the Budget for 2015-16.

“One of the achievements of my Government has been conquering inflation. This decline in inflation requires a structural shift,” he said.

“We expect CPI (Consumer Price Index) inflation to remain close to 5 per cent by end of the year. This will allow further easing of monetary policy,” he said.

In the last Budget, the Finance Minister had said it is also essential to have a modern monetary policy framework to meet the challenge of an increasingly complex economy.

Government will, in close consultation with the RBI, put in place such a framework, he had said.

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Published on February 28, 2015
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