Governor Shaktikanta Das Highlights Stubborn Food Prices as Key Inflation Driver

RBI Governor Shaktikanta Das emphasized that stubborn food prices are the main reason for the slow decline in retail inflation during the MPC meeting. Despite two external members advocating for a rate cut, the majority voted to keep the key interest rate at 6.5% to control inflation.

In the recent Monetary Policy Committee (MPC) meeting, Reserve Bank of India (RBI) Governor Shaktikanta Das pinpointed stubborn food prices as a primary factor impeding the decline in overall retail inflation. His remarks were prompted while voting for maintaining the status quo on policy rates, a stance supported by the majority of the committee.

The MPC, composed of six members, saw a 4:2 vote in favor of retaining the benchmark interest rate at 6.5% for the eighth consecutive time. This decision came despite external members Ashima Goyal and Jayanth R Varma calling for a 25 basis point reduction to spur economic growth.

Governor Das underscored the persistent impact of food prices on inflation, noting that supply-side disruptions continue to delay disinflation. He expressed hope that a normal monsoon season could potentially ease price pressures on essential food items.