RBI Governor Advocates Neutral Stance Amid Inflation Concerns

RBI Governor Shaktikanta Das stresses the need for maintaining price stability to support sustainable growth, advocating for a change to a 'neutral' monetary policy stance amid inflation concerns. The MPC decided to maintain the policy rate at 6.5% while addressing uncertainties in inflation, economic growth, and global factors.

India is hedging against another inflation risk by maintaining a flexible monetary policy, as advised by Reserve Bank Governor Shaktikanta Das during the latest Monetary Policy Committee (MPC) meeting.

Das emphasized that price stability is the cornerstone for sustainable growth, as the MPC opted to keep the benchmark interest rate at 6.5% during its tenth successive meeting, shifting the stance to 'neutral' unanimously. Newly-appointed external members Ram Singh, Saugata Bhattacharya, and Nagesh Kumar contributed to this decision.

Despite short-term inflation upticks, the outlook for depreciation aligns more closely with the central bank's 4% target later in the year, amidst global geopolitical tensions and volatile commodity prices. Deputy Governor Michael Debabrata Patra and Executive Director Rajiv Ranjan echoed support for the neutral stance, focusing on inflation stabilization.

(With inputs from agencies.)