RBI determined to bring down inflation to 4%: RBI Guv

RBI is determined to bringing down inflation to 4 per cent and will remain watchful of risks as more frequent global supply shocks can have profound implications on the management of the price situation, RBI Governor Shaktikanta Das said in a lecture at the Delhi School of Economics.

The Central Bank remains on guard to ensure that the second-order effects in the form of generalisation and persistence with regard to inflation are not allowed to take hold, he added.

The government has mandated the RBI to keep inflation at 4 per cent with a margin of 2 per cent on either side, that is the tolerance limit being 2-6 per cent.

“The frequent incidences of recurring food price shocks pose a risk to the anchoring of inflation expectations, which has been underway since February 2022. We will remain watchful of this aspect also,” Das said.

“The role of continued and timely supply side interventions as is being undertaken by the government assumes criticality in limiting the severity and duration of such food price shocks,” he added in his address.

In these circumstances, he said, it is necessary to be watchful of any risk to price stability and act timely and appropriately.”We remained firmly focused on aligning inflation to the target of 4 per cent,” he said without giving any timeframe.