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Resource centre on India's rural distress
 
 

Inflation is now the top concern: Reserve Bank of India

-The Telegraph

Rising prices have now come to confront central banks globally, particularly after Russia’s invasion of Ukraine

Mumbai: The RBI has brought inflation control to the forefront of its agenda.

Pilloried for going soft on prices, the central bank sharply raised the inflation forecast for the year and warned it would withdraw its accommodative stance if inflation strayed too far away from the target.

The RBI has been prioritising growth over inflation for the last three years in an economy wobbling even before the pandemic.

Rising prices have now come to confront central banks globally particularly after Russia’s invasion of Ukraine that drove up commodity prices including crude. Central banks have tightened rates or resorted to policy normalisation .

The RBI chose to adopt a moderate view on inflation in its February policy even as retail inflation for the month at 6.07 per cent remained above its comfort level of 6 per cent.

The situation turned grim after Russia’s invasion of Ukraine .  While MPC was expected to revise its inflation forecast, it surprised on the higher side with RBI governor Shaktikanta Das terming the revision on account of “war induced factors’’.

The RBI in its February meet had projected inflation to come at 4.5 per cent in 2022-23.

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