MUMBAI (Reuters) – A fall in April retail inflation to an 18-month low of 4.70% gave reassurance that India’s monetary policy is on the right track, central bank governor Shaktikanta Das said at an event in Mumbai on Friday.
India’s retail inflation has now fallen sharply for two consecutive months to within the Reserve Bank of India’s comfort band of 2-6%, prompting economists to expect an extended pause in policy rates. The benchmark repo rate is currently at 6.5%.
“This gives me and my colleagues in the RBI … good amount of confidence that the monetary policy is on the right track,” Das said.
India’s Monetary Policy Committee kept interest rates unchanged in a surprise move in April.
Das said he is confident growth in India will be close to 6.5% for 2023/24.
While lower than the 7% expected for 2022/23, India’s growth would be among the highest across major economies. Urban demand continues to be strong and rural demand has started picking up, he said. Capital expenditure by the government will also aid growth.
The central bank governor said that the Indian rupee has been the least volatile currency compared to peers. The RBI’s effort, he said, is to ensure volatility in rupee is contained.
(Reporting by Siddhi Nayak; writing by Ira Dugal)
