Mumbai (Maharashtra) [India], Reserve Bank of India (RBI) Governor Shaktikanta Das stressed on the central bank's cautious stance on inflation and indicated that any potential rate cut will depend on continued stability in inflation levels.
Speaking at the post-monetary policy press conference, Governor Das once again used the metaphor of "elephant" to describe the current situation of inflation, and said it has declined gradually.
"The elephant in the room (inflation) is moving very slowly, and we are cautious about that. It is around 4.9 per cent, 4.8 per cent and earlier it was 5 per cent. Our target for inflation is 4 per cent and we hope that It will grow soon and most importantly, it should stay there,” said Das.He underlined the importance of not only achieving the inflation target but also stabilizing it over the long term before considering any monetary policy changes.
Central banks had projected inflation to decline to 3.8 per cent in Q2FY25, but again to 4.6 per cent in Q3FY25 and 4.5 per cent in Q4FY25.
The RBI has set the inflation target at 4 percent, a benchmark that reflects the central bank's commitment to maintaining price stability.
The latest inflation figures show a gradual decline, with the current rate hovering around 4.9 percent and 4.8 percent, down from previous levels of 5 percent.
Despite this progress, Governor Das highlighted the need for caution, indicating that the central bank is closely monitoring the inflation trajectory to ensure that it remains stable at or below the target level."We will think about changing our monetary policy only after we are confident about its sustainability within our target, I would not say about cutting rates," he said.
Das's comments show that the RBI is prioritizing long-term stability rather than short-term gains. The central bank's approach signals its preference for a conservative and data-driven policy response, ensuring that any decision to move interest rates is supported by sustained improvements in inflation metrics.
RBI's cautious stance comes in the backdrop of global economic uncertainties and domestic challenges. The central bank expects a normal monsoon to bring down food inflation.Inflation in India is driven by various factors including fluctuations in global commodity prices, supply chain disruptions and domestic economic policies.
The primary objective of a central bank is to maintain price stability, which is important for economic growth and consumer confidence.
Governor Das's metaphor of the inflation "elephant" moving slowly but steadily reflects the vigilance of the central bank and the complexity of managing inflation in a dynamic economic environment.
Speaking at the post-monetary policy press conference, Governor Das once again used the metaphor of "elephant" to describe the current situation of inflation, and said it has declined gradually.
"The elephant in the room (inflation) is moving very slowly, and we are cautious about that. It is around 4.9 per cent, 4.8 per cent and earlier it was 5 per cent. Our target for inflation is 4 per cent and we hope that It will grow soon and most importantly, it should stay there,” said Das.He underlined the importance of not only achieving the inflation target but also stabilizing it over the long term before considering any monetary policy changes.
Central banks had projected inflation to decline to 3.8 per cent in Q2FY25, but again to 4.6 per cent in Q3FY25 and 4.5 per cent in Q4FY25.
The RBI has set the inflation target at 4 percent, a benchmark that reflects the central bank's commitment to maintaining price stability.
The latest inflation figures show a gradual decline, with the current rate hovering around 4.9 percent and 4.8 percent, down from previous levels of 5 percent.
Despite this progress, Governor Das highlighted the need for caution, indicating that the central bank is closely monitoring the inflation trajectory to ensure that it remains stable at or below the target level."We will think about changing our monetary policy only after we are confident about its sustainability within our target, I would not say about cutting rates," he said.
Das's comments show that the RBI is prioritizing long-term stability rather than short-term gains. The central bank's approach signals its preference for a conservative and data-driven policy response, ensuring that any decision to move interest rates is supported by sustained improvements in inflation metrics.
RBI's cautious stance comes in the backdrop of global economic uncertainties and domestic challenges. The central bank expects a normal monsoon to bring down food inflation.Inflation in India is driven by various factors including fluctuations in global commodity prices, supply chain disruptions and domestic economic policies.
The primary objective of a central bank is to maintain price stability, which is important for economic growth and consumer confidence.
Governor Das's metaphor of the inflation "elephant" moving slowly but steadily reflects the vigilance of the central bank and the complexity of managing inflation in a dynamic economic environment.
