Inflation is manageable in India, says Nirmala Sitharamantext_fields
New Delhi: Finance Minister Nirmala Sitharaman said that inflation is at a manageable level in the country. Her statement comes a day after the RBI hiked the interest rate by 50 basis points to tackle inflation. This is the fourth straight increase to tame high inflation.
She was speaking at the annual day function of regulator IBBI and insisted that India is in an era of robust economic activities.
Amid the crisis created by the Russia-Ukraine war, RBI retained its inflation projection for FY23 at 6.7%. The international community is facing food and fuel shortages due to geopolitical tensions. Experts are anticipating inflation to be under control from January. The central bank is mandated to keep retail inflation in a band of 2-6%. Inflation has remained above 6% since January 2022 and rose to 7% last month.
The monetary policy committee (MPC), comprising three members from the RBI and three external members, raised the key lending rate or the repo rate to 5.90% with five out of the six voting in favour of the rise. Now, a total of 190 basis points have increased its first unscheduled mid-meeting increase in May.
"The inflation trajectory remains clouded with uncertainties arising from continuing geopolitical tensions and nervous global financial market sentiments. Against this backdrop, MPC was of the view that the persistence of high inflation, necessitates further calibrated withdrawal of monetary accommodation to restrain broadening of price pressures, anchor inflation expectations, and contain the second round effects," said Governor Shaktikanta Das.