Mumbai, India – The Reserve Bank of India Governor, Shaktikanta Das, has expressed satisfaction with the recent drop in India’s Consumer Price Index (CPI). In April, the CPI inflation rate reached an 18-month low of 4.7%, down from 5.7% in the previous month, indicating that the country’s monetary policy is on the right path.
The central bank has raised the repo rate by 250 basis points since May 2022 to meet the 4% CPI target. The repo rate is the rate at which commercial banks borrow money from the central bank. The RBI uses the repo rate as a tool to control inflation by either increasing or decreasing it.
“The decline in CPI inflation is a positive sign and indicates that our monetary policy is on the right path,” said Shaktikanta Das. “We have been raising the repo rate consistently to meet our inflation target, and this drop in CPI is evidence that our measures are working.”
The drop in CPI inflation is significant, as it indicates that the cost of goods and services is becoming more affordable for consumers. This is good news for the Indian economy, which has been grappling with high inflation for some time.
However, experts warn that the RBI must continue to be vigilant and keep a close eye on inflationary pressures. The recent drop in CPI inflation is partly due to a fall in food prices, but other factors such as rising fuel prices and supply chain disruptions could push inflation higher in the coming months.
The RBI’s Monetary Policy Committee (MPC) is scheduled to meet in June to review the policy rate. The MPC’s decision will be closely watched by investors and economists, as it will provide an indication of the central bank’s stance on inflation and interest rates.
Overall, the recent drop in CPI inflation is a positive development for the Indian economy. It indicates that the RBI’s efforts to control inflation are working, and that the country’s monetary policy is on the right path. However, the RBI must remain vigilant and continue to monitor inflationary pressures to ensure that the economy remains on a stable footing.