A person familiar with the Reserve Bank of India’s (RBI) rate-setting committee (MPC) deliberations said on Tuesday, the panel continues to target inflation at 4% even as food prices remain higher.
Key Quotes:
“The tolerance band of 2%-6% is meant to account for short-term disruptions and shocks.”
“Policy actions should follow the inflation trend and outlook.”
The RBI Governor and MPC Chair Shaktikanta Das said last week that inflation, especially food inflation, had surprised the panel. The MPC will closely monitor the situation and act in a proactive manner.
“There is space for action, the MPC will act in time and perhaps act ahead of time as it has done in 2019,” Das added.
Meanwhile, USD/INR hit a new three-week low of 71.185 in the last minutes before recovering slightly to 71.25, still down 0.07% on the day.
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