Reserve Bank of India: Governor of Rijerve Bank of India ( RBI ) Shaktikant Das said that it is a priority for South Asian countries like India to curb inflation. Uncontrolled prices can pose a risk to growth and investment scenarios. Das addressed the program organized on behalf of the International Monetary Fund (IMF), stating that the increasing level of debt and the constant pressure to raise prices are risks to economic growth. In such a situation, both of them have to be overcome. He said that South Asian countries have faced many external shocks in the last few years.
Financial market fluctuations
In addition to disrupting the global supply chain from the Kovid-19 epidemic, the Russia-Ukraine war created a food and energy crisis. Aggressive monetary policies created a situation of financial market fluctuations. He said that these external shocks have put constant pressure on prices in South Asian economies. The RBI governor said, ‘Although inflation should decrease further than the price of commodity products in the last few months and the supply chain bottlenecks. If inflation persists at a high level, then the risks of growth and investment scenario may increase.’
Increased repo rate to overcome inflation
He said that the countries of the region are heavily dependent on imported fossil fuels, and imported fuels are vulnerable to inflation. Das said, ‘Aimited intervention involving the supply side, fiscal, trade policy and administrative reforms have also become important tools with credible monetary policy measures to bring inflation down.’ RBI itself took the step of raising the repo rate five times in seven months to overcome inflation last year. During this time the repo rate increased by a total of 2.25 percent and it has now reached 6.25 percent.
RBI is relieved to come down the retail inflation rate to 5.88 percent in November. “Although our view of deflation should be in keeping with the increasing risk of growth scenario amid fears of global growth and declining trade.’ He said that apart from inflation, reducing the weaknesses related to external debt, focusing on more productive sectors, The South Asian region should focus on emphasizing energy security and increasing cooperation for a green economy. (Input: PTI )
