India monetary policy has to remain actively disinflationary: RBI Guv Shaktikanta Das
Monetary policy in India must remain actively disinflationary despite the recent sharp fall in core inflation, Reserve Bank of India Governor Shaktikanta Das said at the World Economic Forum in Davos.
«When inflation is still above 5.5%, rather close to 6%, our monetary policy has to remain actively disinflationary and it would be too premature to talk in terms of a pivot in our monetary policy,» Das said in an interview with Reuters.
He however acknowledged the recent fall in core inflation, which strips out volatile food and fuel prices, and said it gives them the satisfaction that monetary policy is working but the target for the monetary policy committee remains the headline number.
The apex bank chief said the global geo-political situation remains volatile and could impact economies around the world with food inflation particularly vulnerable to spikes on the back of disruption in global supply chains and other risks.
Das said he expects January inflation to moderate and the trend has been moderating but unless inflation reaches 4% on a durable basis, the bank cannot get lulled into a complacency or think of changing its policy focus.
Annual retail inflation rose 5.69% in December, the fastest pace in four months but core inflation dropped to a four-year low of 3.8% from around 4.1% in November.
Das, whose term is ends in December, would be the longest serving RBI governor since the 1991 liberalisation.
He has led the world's fifth largest economy since 2018, keeping inflation and the currency relatively stable through successive shocks including the failure of a large non-bank lender, Covid-19 and the Ukraine war.
He reiterated that the RBI intervenes in the exchange rate market only to prevent undue
