MUMBAI: India’s central bank seeks to stabilize inflation expectations as it looks to revive economic growth, Governor Shaktikanta Das told a local newspaper in an interview, and urged the government to consider reducing fuel taxes to ease price pressure.
Das told Business Standard in an interview published on Thursday, “We are acutely aware and sensitive to the fact that a hasty change in the monetary policy stance or monetary policy stance can have dire economic, reform consequences. ”
“But we want to keep inflation expectations within a tolerance range and close to the inflation target in the medium term,” he said.
India’s retail inflation is expected to hit a seven-month high in June on the back of rising food and fuel prices. Reserve Bank of IndiaA comfort zone of 2%-6% for the second month in a row, a Reuters poll showed.
Data is on Monday.
Das said the RBI wants to keep inflation expectations at 4% over pre-pandemic levels as it reduces uncertainty for investors and supports growth.
Das said, “The government has taken some supply side measures in recent weeks, but more supply side measures are necessary and we are really looking forward to more such measures, especially on taxes from both the central and state governments.” ”
Late last month, India extended federal guarantees on bank loans to small businesses and the health and tourism sectors to help through the COVID-19 pandemic, but no direct incentives to boost demand or ease price pressures. not given.
Higher taxes on domestic fuel coupled with rise in global crude oil prices have added to inflationary pressures.
Das said US Federal ReserveThe policy action of India will affect all the economies including India.
He also cautioned about the risks of volatility in capital flows as ultra-accommodative policies of advanced economies have kept global liquidity low and said emerging economies should create their own safety nets.
Das said India’s foreign exchange reserves of $609 billion are sufficient for 15 months of imports and more than the country’s total external debt.
“The current level of our reserves gives us confidence, but we cannot be complacent.”
Das told Business Standard in an interview published on Thursday, “We are acutely aware and sensitive to the fact that a hasty change in the monetary policy stance or monetary policy stance can have dire economic, reform consequences. ”
“But we want to keep inflation expectations within a tolerance range and close to the inflation target in the medium term,” he said.
India’s retail inflation is expected to hit a seven-month high in June on the back of rising food and fuel prices. Reserve Bank of IndiaA comfort zone of 2%-6% for the second month in a row, a Reuters poll showed.
Data is on Monday.
Das said the RBI wants to keep inflation expectations at 4% over pre-pandemic levels as it reduces uncertainty for investors and supports growth.
Das said, “The government has taken some supply side measures in recent weeks, but more supply side measures are necessary and we are really looking forward to more such measures, especially on taxes from both the central and state governments.” ”
Late last month, India extended federal guarantees on bank loans to small businesses and the health and tourism sectors to help through the COVID-19 pandemic, but no direct incentives to boost demand or ease price pressures. not given.
Higher taxes on domestic fuel coupled with rise in global crude oil prices have added to inflationary pressures.
Das said US Federal ReserveThe policy action of India will affect all the economies including India.
He also cautioned about the risks of volatility in capital flows as ultra-accommodative policies of advanced economies have kept global liquidity low and said emerging economies should create their own safety nets.
Das said India’s foreign exchange reserves of $609 billion are sufficient for 15 months of imports and more than the country’s total external debt.
“The current level of our reserves gives us confidence, but we cannot be complacent.”
.