Amid the prevailing inflationary pressure with the CPI number touching an eight-year high of 7.79 per cent, RBI Governor Shaktikanta Das on Monday said the central bank and the government have taken a number of steps in the past few months to control price rise in the country and the actions will have a sobering impact on inflation going forward.
In an interview with CNBC-TV18, Das said, “We have entered into another phase of coordinated action between the fiscal and monetary authorities to check inflation. The RBI has taken a number of steps over the past two or three months… The government has taken action on wheat, various kinds of intermediaries, raw materials and of course the big one on petrol and diesel… Now, all these put together will have a sobering impact on inflation going forward.”
He added that we are on the drawing table reworking the numbers and “we will give out the numbers in the next MPC scheduled in the first week of June”.
On asked regarding the CNBC Poll that suggested inflation not to come below the 6 per cent level before the fourth quarter of the current financial year, he said, “October is still quite a distance away. Let’s not speculate now… There could be other actions also in the intervening periods. I cannot give a number today because we are working on it right now. We can only say in the June MPC as to what will be the inflation projection going forward.”
The RBI governor added that professional forecasters’ numbers move in tandem with the RBI and their numbers are sometimes lower, sometimes higher. “Without working on the numbers and in the run-up to the MPC, it won’t be correct on my part to give out a number.”
In the global context, Das said, “Interest rates in almost every country today are negative, except Russia and Brazil. The target for inflation for advanced economies is about 2 percent. Except for Japan and one more country, all advanced economies have inflation of over 7 percent.”
The Russia-Ukraine war also derailed macro plans for all central banks. “In February, we had assumed crude oil to be under $100/bbl and the roadmap in February showed that inflation would moderate,” Das said.
The Consumer Price Index (CPI)-based inflation, which the RBI takes as a reference point while deciding on the monetary policy, in April 2022 soared to an eight-year high of 7.79 per cent. It is as compared with 4.23 per cent in April 2021 and 6.97 per cent in March 2022. Inflation in the food basket rose to 8.38 per cent in April, from 7.68 per cent in the preceding month and 1.96 per cent in the year-ago month.
Inflation in cereals and products in April jumped to a 21-month-high level; vegetables at a 17-month high; and spices at a 17-month high. Consumer food price inflation rose to 8.38 per cent, which is a 17-month high.
Wholesale price-based inflation also spiked to a record high of 15.08 per cent in April on rising prices across segments from food to commodities. The WPI-based inflation was 14.55 per cent in March and 10.74 per cent in April last year.
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