Inflation appears to have peaked and is beginning to moderate, with the Reserve Bank of India’s approach being to tackle it squarely while keeping growth sacrifice within manageable limits, according to Governor Shaktikanta Das.
Emphasising that inflation is stabilizing, Das said, its projection will be reviewed at the forthcoming MPC meeting taking into account the evolving macroeconomic situation.
Retail inflation eased to 7.01 per cent in June against 7.04 per cent in May. RBI had revised the inflation target for FY23 to 6.7 per cent from the earlier projection of 5.7 per cent at the last MPC meeting.
Speaking at Bank of Baroda’s Annual Banking Conference, the Governor underscored that inflation is stabilising. However, imported inflation is a challenge.
“Countries are facing unexpectedly high inflation, including food inflation, supply chain disruptions and demand-supply imbalances in product and labour markets.
“Central banks are tightening monetary policy at a rapid pace, raising fears of imminent recession. Commodity prices have eased somewhat from their June high,” Das said.
The Governor observed that whether commodity prices will sustain at these levels or bounce back or go down depends on many things.