Jaipur (Rajasthan) [India], August 26 (ANI): The 597th meeting of the Central Board of Directors of the Reserve Bank of India was held on Friday at its regional office in Jaipur under the chairmanship of Governor Shaktikanta Das.

Mumbai Apr 22 PTI All the six members of the RBIs rate setting panel expressed concern over inflation and Governor Shaktikanta Das stressed that the central bank will have to constantly re-assess the dynamic and fast changing situation and tailor its actions accordingly as per the minutes of the recent MPC meeting released on Friday Das-headed Monetary Policy Committee MPC which held its meeting from April 6-8 unanimously decided to keep the borrowing costs unchanged at a record low for the 11th time in a row in a bid to continue supporting economic growth despite inflation edging higher especially in the wake of the Russia-Ukraine conflict The central banks MPC has six members including the governor Das opined that the current geopolitical situation has led to an upward revision of RBIs inflation projections for 2022-23 and the estimates now point to inflation remaining above the upper tolerance band in the near-term even as growth projections have undergone downward revisions The circumstances warrant prioritising inflation and anchoring of inflation expectations in the sequence of objectives to safeguard macroeconomic and financial stability while being mindful of the ongoing growth recovery he said as per the minutes Further Das said there was a need to avoid undue disruptions in the financial markets Given this delicate balance between inflation and growth he voted for retaining the repo rate at 4 per cent and maintaining the accommodative stance The situation is dynamic and fast changing and we should constantly re-assess the situation and tailor our actions accordingly he said MPC member and RBI Deputy Governor Michael Debabrata Patra opined that in a world in which de-globalisation seems imminent one thing has become globalised and that is the alarm about inflation according to the minutes With 60 per cent of developed countries facing inflation above 5 per cent -- unheard of since the 1980s -- and more than half of the developing countries experiencing inflation above 7 per cent the climb in prices is testing societal tolerance levels he said during the meeting While Reserve Bank of India RBI decided to maintain status quo it raised inflation forecast to 57 per cent for the current fiscal up from its 45 per cent estimated in February RBI also lowered the economic growth forecast to 72 per cent for 2022-23 from the previous outlook of 78 per cent This compares to real GDP growth of 89 per cent in 2021-22 RBI Executive Director and MPC Member Mridul K Saggar opined that the Russia-Ukrained war will also have significant detrimental effects on growth As per the minutes he said considering the emergence of a different growth-inflation trade-off it is best to start withdrawing monetary accommodation through liquidity and rate actions that can begin with raising the floor and normalising the corridor Monetary policy is not a rocket science but the timing of the launch of the rocket is nevertheless important as monetary policy transmits to its final goals with long and variable lags he said Besides the three RBI officials Shashanka Bhide Ashima Goyal and Jayanth R Varma are three government-appointed members of MPC Bhide was of the view that the present situation reflects improving conditions with respect to managing the COVID threat with the scaled-up vaccinations and an understanding of measures to control any further outbreak of infections However improved demand conditions in the face of fresh global supply constraints may lead to increased inflation affecting the growth recovery itself he said As per the minutes Goyal opined there was room to cut fuel taxes to mitigate the pass through of international prices to consumers Excise duty could go back to 2019 levels that were high enough to limit oil consumption even as other efforts to substitute towards renewable sources continue she said Further she said both fiscal and monetary policy must use the space available to smooth international shocks while taking unavoidable hits Varma said that with inflation projected to breach the upper tolerance limit for several months it is imperative for MPC to communicate its resolve to ensure that inflation remains within the target going forward It is also necessary to prepare the markets for the withdrawal of the post pandemic monetary accommodation he said Further Varma said that in the extremely uncertain situation that prevails today it is very important for MPC not to issue any forward guidance that would tie its hands The next meeting of the MPC is scheduled to be held from June 6-8 PTI NKD CS RAM

Mumbai Oct 22 PTI The Reserve Bank remains laser-focused to bring back retail inflation to 4 per cent over a period of time in a non-disruptive manner Governor Shaktikanta Das stressed while voting for status quo in interest rates as per minutes of the October policy meeting released on Friday The central bank has been mandated by the government to ensure the Consumer Price Index CPI based inflation is at 4 per cent with a band of 2 per cent on either side The retail inflation which was above 6 per cent during May and June has started moving down and stood at 435 per cent in September As per the minutes of the Monetary Policy Committee MPC meeting held during October 6 to 8 Das said in its August 2021 meeting the panel was faced with the challenges posed by headline inflation exceeding the upper tolerance threshold for the second successive month The actual inflation outcomes for July-August with inflation registering a substantial moderation to move within the tolerance band have vindicated the MPCs outlook and monetary policy stance he noted The more-than-expected softening of inflation in July and August this year was underpinned by the significant lowering in food price momentum especially in August Going forward the governor said if there are no spells of unseasonal rains food inflation is likely to register significant moderation in the immediate term aided by record kharif production more than adequate food stocks supply-side measures and favourable base effects Volatile crude oil prices particularly the resurgence since mid-September is pushing pump prices to new highs raising risk of further spillover of high transportation cost into retail prices of goods and services he said He opined that continued monetary support is necessary as the economic recovery process even now is delicately poised and growth is yet to take firmer roots At this critical juncture our actions have to be gradual calibrated well timed and well-telegraphed to avoid any undue surprises he asserted While voting to keep the policy rate unchanged and continue with the accommodative stance Das said In parallel we remain laser-focused to bring back the CPI inflation to 4 per cent over a period of time in a non-disruptive manner All members of the MPC -- Shashanka Bhide Ashima Goyal Jayanth R Varma Mridul K Saggar Michael Debabrata Patra and Shaktikanta Das -- unanimously voted to keep the policy repo rate unchanged at 4 per cent Also all members except Varma voted to continue with the accommodative stance Deputy Governor Patra said while the trajectory of inflation may undershoot the projections made in August it is likely to be uneven sluggish and prone to interruptions He also opined that even as domestic macroeconomic configurations are improving the risks from global developments are rising and warrant a close watch as they could stifle the recovery that is underway in India Exports are directly at risk from logistics bottlenecks shortages of containers and personnel in international shipping and elevated freight rates Policy interventions including coordinated multilateral efforts are needed urgently to prevent global trade from choking he opined In my view the biggest risks to Indias macroeconomic prospects are global and they could materialise suddenly he added RBI Executive Director Saggar stressed that an Arjunas eye needs to be kept on commodity prices and we need to consider different scenarios according to which we can calibrate our policies He said that in his assessment the probability that oil prices may touch or cross USD 85 per barrel before the year ends and could average USD 80 or more in second half is not insignificant It can have significant impacts that are hard to precisely quantify due to non-linearities and uncertainties but on a ballpark from the baseline can be expected to raise inflation by 15-20 bps lower growth by 13-15 bps have negligible effects on fiscal subsidies and widen CAD by about 025 per cent of GDP he added Varma the external member on the panel said several arguments he made in his August MPC meeting continue to be valid Since August I have become increasingly concerned about two other risks that have become salient globally in recent weeks he said The first is that the ongoing transition to green energy worldwide poses a significant risk of creating a series of energy price shocks similar to that in the 1970s The second recent concern is about the tail risk to global growth posed by emerging financial sector fragility in China he said Both of these risks -- one to inflation and the other to growth -- are well beyond the control of the MPC but they warrant a heightened degree of flexibility and agility A pattern of policy making in slow motion that is guided by an excessive desire to avoid surprises is no longer appropriate said Varma who voted against the accommodative stance External member on the MPC Ashima Goyal said global price shocks have turned out to be more persistent contributing to sticky core inflation and tax cuts on petroleum products are essential to break the upward movement that could impart persistence to domestic inflation She also said there is large uncertainty built into current prices because of the speculative element that seeks to profit from aggravated shortages Large sudden falls are therefore possible she said and added oil prices have shown high volatility She further said the climate change activism that is partly responsible for current spikes will also reduce oil demand in the future The third external member on the MPC Shashanka Bhide said investment activity has picked up over the levels seen 2020-21 but is yet to reach the 2019-20 levels Accelerated progress in vaccinations and a number of economic policy initiatives to open up opportunities for investment are among the factors constituting positive stimulus to fresh investments Three members on the MPC are RBI officials and the government appoints three eminent economists as external members on the panel PTI NKD NKD ABM ABM