The level of retail price inflation in the country has left the common man in a bad situation. At the same time, this task is also becoming challenging for the monetary policy formulated by the Reserve Bank of India to control inflation. Deputy Governor Michael Patra himself gave the reasons for this.
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Retail price inflation in the country (Retail Inflation in India) It has been at its highest level for a long time. This constant Reserve Bank of India (Reserve Bank of India) The target is being exceeded and it is making life difficult for the common man. But do you know RBI to keep inflation under control? (RBI) which is monetary policy (fiscal policy) By creating, it is becoming difficult to prepare for him now. Central Bank Deputy Governor Michael Patra also explained the reason.
Monetary policy is currently difficult to formulate
Reserve Bank of India Deputy Governor Michael Patra said that monetary policy making has become a very challenging task these days. He said the volatile environment, data delays and their frequent revisions have made monetary policy formulation difficult.
In the explanation of this, he said, in the first week of December, the monetary policy committee (Monetary Policy Committee) There will be a meeting, after which the next monetary policy review will be presented. Discussions on this, while October inflation data will be needed, will also depend on economic growth data for the July-September quarter as of November 30.
Inflation and Monetary Policy Link
Patra was speaking at SBI’s annual conference. He said monetary policy should be concerned with the future. Because if the policy rate changes it affects the interest rate of the loan. But its impact on the economy takes a long time to reach demand. So we can only look at future inflation, not tomorrow.
He said that on the basis of one month to three months old data, the RBI has to analyze how much the inflation is and how the pace of growth is going to be. Patra is responsible for overseeing the RBI’s monetary policy.
Russia-Ukraine war, global inflation affected
Pot said, Russia-Ukraine war (Russia-Ukraine War) Apart from this, the increase in oil and food prices is a major blow to economic growth. They have to face monetary policy after the release of official data. Delays in data make this difficult, hence the risk of frequent revisions and, sometimes, large changes in data.
Patra said in a lighter vein that if the NSSO had the right to change the figures. If companies can change their earnings figures, they should also have the right to change September interest rates (prior monetary policy).
However, we tell you that RBI has recently started artificial intelligence and machine learning based analytics.
English headline: RBI deputy governor says data delay creates problems in monetary policy formulation that controls inflation.