'RBI To Achieve Smooth Economic Transition With Inflation Closer To 4 percent'

The Reserve Bank of India (RBI) will make sure that the economy has a soft landing and that inflation is closer to 4%, RBI Governor Shaktikanta Das said. He promised a "soft landing" for the economy, with inflation hovering around 4 percent and little effect on economic expansion.

Retail inflation, according to him, looks to have peaked, and the Monetary Policy Committee (MPC) will revise its 6.7 percent inflation forecast for the fiscal years 2022–2023 at its upcoming meeting in August.

Up until the start of the European War, Das said that the nation had experienced a sort of soft landing. New problems have arisen as a result, such as rising commodity and crude prices and their effects on the nation; tighter monetary policy by foreign central banks and its effects; capital outflows; and currency devaluation, over which RBI has little influence. He added that the RBI carefully considers the potential impact its decisions about liquidity and policy rates will have on economic expansion and resurgence. However, he claimed that the RBI now places inflation and growth in that order of importance, Das agreed.

The governor said the country has benefited greatly from the flexible inflation targeting system. According to the flexible framework for inflation targeting, the RBI anticipates keeping retail inflation at 4% (+/- 2%). For India, he said, "the framework has worked effectively before the epidemic, during the pandemic, and even now. I would say that we are pretty much in sync with the requirements of time in terms of steps that need to be taken."