Fighting inflation is RBI’s top priority, trying not to hurt growth, says Shaktikanta Das

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Reserve Bank of India Governor Shaktikanta Das said on Friday that tackling inflation was the central bank’s top priority and that the RBI would try to minimize its impact on growth. He added that global factors are impacting inflation and growth in India.

In an interview with a media company, the RBI Governor said that the national economic activities, including high frequency indicators, are resilient. He said the central bank was also investigating why GDP growth in the April-June quarter of 2022 was lower than the RBI had forecast.

India’s GDP grew by 13.5% in the June quarter of 2022 (Q1FY23). This is the fastest growth in a year, with the country’s GDP growing 4.1% in the previous quarter (Q4FY22), 5.4% in the December 2021 quarter of FY 22 and 8.4% in the September 2021 quarter. However, FY23 first quarter growth fell short of the RBI’s projection of 16.2%.

The country’s inflation in April stood at 7.79%, before dropping to 7.04% in May and falling back to 7.01% in June. Consumer inflation continued to fall to 6.71% in July. However, it is still above the RBI’s 2-6% target.

The RBI Governor said he will discuss first quarter GDP growth at the next meeting of the Monetary Policy Committee (MPC). He also said that the global slowdown and global inflation are impacting India.

Das also said that the RBI continuously monitors the credit growth of all banks. The RBI warns banks when they see excessive credit growth in an area. “Our digital rules are well received by all lender segments. The new RBI digital rules are consumer-centric, with an emphasis on transparency. »

RBI’s digital rules focus on risk assessment, management and mitigation.

He said India’s large foreign exchange (forex) reserves provided a strong buffer for the Indian economy. Das also said foreign exchange reserves are keeping the rupee stable.

The RBI’s monetary policy committee raised the key repo rate by 50 basis points to 5.4% in early August. It was the third consecutive increase after a 50% increase in June and a 40% increase in May.

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