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Inflation to ease in second half of FY23: RBI Governor
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IANS | 09 Jul, 2022
The inflation in India is expected to ease in a gradual manner in the
second half of FY23, said Shaktikanta Das, Governor, Reserve Bank of
India (RBI) on Saturday.
Speaking at the Kautilya
Economic Conclave, organised by Institute of Economic Growth, New Delhi,
Das said, with the supply outlook appearing favourable and several high
frequency indicators pointing to resilience of the recovery in the
first quarter (April-June) of 2022-23, the inflation may ease gradually
in the second half of 2022-23, precluding the chances of a hard landing
in India.
Tracing the history of inflation in India, Das said in
early 2022 inflation was expected to moderate significantly to the
target rate of four per cent by third quarter of FY23, with a projected
average inflation rate of 4.5 per cent for 2022-23.
"This
assessment was based on an anticipated normalisation of supply chains,
the gradual ebbing of Covid-19 infections and a normal monsoon. The
median inflation projection from the Survey of Professional Forecasters
at five per cent for 2022-23 was also quite benign," he said.
However,
this was overtaken by the Russia-Ukraine war since February 2022,
leading to a sharp spike in global crude oil and other commodity prices.
"Global
food prices reached a historical high in March and their effects were
felt in edible oil, feed cost and domestic wheat prices. The loss of
Rabi wheat production due to an unprecedented heat wave put further
pressures on wheat prices. Cost-push pressures were also aggravated by
supply chain and logistics bottlenecks due to the war and sanctions,"
Das said.
According to him, RBI's objective was to safeguard the economy and preserve financial stability.
"Our
endeavour has been to ensure a soft landing. These objectives continue
to guide our actions even today and it will continue to be so in
future," he added.
Das said the benefits of globalisation come
with certain risks and challenges. Shocks to prices of food, energy,
commodities and critical inputs are transmitted across the world through
complex supply chains.
"In fact, recent developments call for
greater recognition of global factors in domestic inflation dynamics and
macroeconomic developments which underscore the need for enhanced
policy coordination and dialogue among countries to achieve better
outcomes," he said.
According to him, the insurance against such
inevitable global shocks ultimately is built on sound economic
fundamentals, strong institutions and smart policies. Price stability is
key to maintaining macroeconomic and financial stability.
"We
will continue to calibrate our policies with the overarching goal of
preserving and fostering macroeconomic stability. In this endeavour, we
will remain flexible in our approach while being cogent and transparent
in our communication," Das said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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