India Central Bank Vigilant On Last Mile Disinflation, Das Says
Last mile of disinflation is 'often the most difficult part of the journey,' Das said.
(Bloomberg) -- India’s central bank is vigilant on the evolving price situation as a stable and low inflation will provide support for sustainable economic growth, Reserve Bank of India Governor Shaktikanta Das said.
Last mile of disinflation is “often the most difficult part of the journey,” Das said in a keynote speech at a conference for South East Asian Central Banks in Mumbai Thursday. While inflation has moderated, “recurring food price shocks and renewed flash points on the geo-political front,” pose challenges, he said.
Higher price gains prompted the monetary authority to stick to its hawkish policy stance last week, indicating it’s in no rush to cut interest rates until later in the year. Inflation remains well above the central bank’s 4% target due to volatile food costs. Warmer-than-normal temperatures across large parts of the country also risks hurting crops and keeping prices higher.
Here’s more from Das’s speech:
- Multilateralism must be “re-energized,” and fair and equitable agreements on critical minerals and food corridors are necessary
- Improving infrastructure remains key to long-term growth
- Skill enhancement and increasing female labor force participation key to potential growth of the South East Asia region, he said
- Smooth and orderly green transition is necessary to avoid disruptions to economic activity
- Global tie-ups suggest India’s Unified Payments System for instant mobile payments has the potential “to become an international model for cross-border payments”
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