India's central bank is at war. Yes, that's what Governor Shaktikanta Das said in a post-policy meeting after keeping rates unchanged (with one vote for rate cut) for the 10th straight time but unanimously agreed to shift stance to neutral from focusing on withdrawal of accommodation. What the Reserve Bank of India-led rate setting panel also decided is to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.
Considering the balanced inflation and growth trends, Shaktikanta Das announced the MPC's stance shift. This change allows the MPC greater flexibility while maintaining focus on aligning inflation with the target without compromising growth. RBI cautions on inflation: ‘Need to keep inflation horse on a tight leash, it may bolt again.
..’ | Watch The RBI kept its inflation forecast for FY25 unchanged at 4.
5%, amid food price concerns. Oil prices rose above $80 for the first time since August due to Middle East tensions . RBI governor Shaktikanta Das said RBI aims for a durable alignment of inflation with its target while supporting growth .
However, Das cautioned that inflation might rise again, with unexpected weather and geopolitical events posing risks. Also Read: RBI MPC shifts gear to 'neutral' while retaining repo rate at 6.5% So, it again boils down to the prices in an economy where iPhones and luxury cars are selling like hot cakes while millions are still provided free food for their dismal or zero income.
T.