Amit Shah
RBI governor Shaktikanta Das hints at raising interest rates
Published
2 years agoon
Reserve Bank of India (RBI) Governor Shaktikanta Das has indicated to increase the repo rate in the monetary policy meeting to be held in June and further meetings. This can make the loan more expensive. RBI will also release a new inflation estimate in the June meeting. He also said that the economic recovery is gaining momentum. RBI Governor said this in an interview to CNBC TV 18. Inflation is the biggest concern for RBI at present.
RBI Governor Shaktikanta Das said, “Except Russia and Brazil, interest rates are negative in almost every country today. The inflation target for advanced economies is around 2%. Barring Japan and one other country, inflation is more than 7% in all advanced economies. A negative interest rate means that you get less interest than the rate of inflation on a fixed deposit.
Concerned over the ever-increasing inflation, the Reserve Bank of India (RBI) had increased the repo rate from 4% to 4.40% in an emergency meeting last month. By the way, the monetary policy meeting is held every two months. The first meeting of this financial year was held on 6-8 April. The next meeting will be in June. RBI changed the repo rate after 22 May 2020. Since then it has remained at a historic low of 4%.
The Consumer Price Index (CPI)-based retail inflation in May rose to 7.79% in April. Inflation reached an 8-year peak due to rising oil prices from food items. Inflation in May 2014 was 8.32%. This was the fourth consecutive month that the inflation rate crossed the RBI’s upper limit of 6%. It was recorded at 6.07% in February 2022, 6.01% in January and 6.95% in March. Retail inflation in April 2021 stood at 4.23%.
On liquidity projections, the governor Shaktikanta Das said that the central bank is looking at normalizing the liquidity situation in the economy in a multi-year time cycle. Regarding the depreciating rupee, the RBI governor assured that the central bank will prevent excessive volatility of the rupee in the currency market. Regarding the current account deficit, the RBI governor said that he will manage it easily. He said, India’s exports remain strong.
Credent TV Editorial Team
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