RBI Governor stresses on low and stable inflation for economic growth

RBI Governor stresses on low and stable inflation for economic growth

The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, has emphasised the importance of maintaining low and stable inflation for achieving sustainable economic growth. He said that inflation erodes the purchasing power of consumers and affects their welfare, as well as the profitability and competitiveness of businesses.

The RBI will remain vigilant to navigate through the last mile of disinflation as it is often the most difficult part of the journey, RBI Governor said.

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Das was speaking at the 14th C D Deshmukh Memorial Lecture organised by the National Council of Applied Economic Research (NCAER) on Friday. He said that the RBI has adopted a flexible inflation targeting framework since 2016, which has helped to anchor inflation expectations and enhance the credibility of monetary policy.

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He also said that the RBI has been proactive and pragmatic in responding to the unprecedented challenges posed by the Covid-19 pandemic, which has disrupted the global and domestic economy. He said that the RBI has taken various measures to support liquidity, credit, and growth, while ensuring financial stability and price stability.

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Das said that the Indian economy is recovering from the pandemic-induced contraction, and that the growth outlook has improved significantly. He said that the RBI expects the real GDP growth to be 10.5 per cent in 2024-25, and that the inflation is likely to remain within the target range of 4 per cent with a tolerance band of +/- 2 per cent.

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He also said that the RBI is committed to preserving the long-term stability of the Indian economy, and that it will continue to monitor the evolving macroeconomic and financial conditions, and calibrate its policy actions accordingly. He said that the RBI will also strive to foster an enabling environment for innovation and digital transformation in the financial sector, and to deepen financial inclusion and literacy.

Source : The Indian Express

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