RBI MPC Meeting Minutes: Banking sector regulator Reserve Bank of India Governor Shaktikanta Das said that inflation has not yet been brought down, hence no childish decision of any kind on the policy front. There may be a setback to the successes that RBI has achieved so far.
Inflation has to be tackled completely
RBI has released the minutes of the meeting of the Monetary Policy Committee held between 6 to 8 February 2024 on Thursday 22 February 2024. According to this, the RBI Governor said that monetary policy needs to be very cautious and it would be a mistake to think that our work of dealing with inflation has been completed. RBI Governor voted in favor of no change in interest rates.
It is important to be cautious about inflation
RBI Governor said that the market is constantly expressing apprehension that the Central Bank can make major changes on the policy front but any childish step can spoil the successes that have been achieved so far. However, the concern of the RBI Governor seems to be justified at the moment. Retail inflation rate has decreased in the month of January and it has come down to 5.10 percent. But food inflation still remains at 8.30 percent. Food inflation rate is high due to inflation of pulses and vegetables. In January, the inflation rate of pulses was 19.54 percent while the inflation rate of vegetables was 27.03 percent.
No impact of geopolitical risk
RBI MPC member Ashima Goyal said that geopolitical risk continues but due to this neither the prices of crude oil have increased nor the global growth rate has slowed down as was expected. He said that as the inflation rate is coming closer to the target, central banks have indicated a rate cut in 2024. Because they believe that despite reduction in inflation from here, further increase in interest rates would not be appropriate.
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