RBI Governor Advocates Caution Amid Inflation Concerns

India's Central Bank Head emphasizes maintaining a neutral monetary policy stance, despite short-term inflation spikes. With stable economic growth and a moderated inflation outlook, RBI remains vigilant about potential risks like geopolitical tensions and food price fluctuations to balance inflation and growth effectively.

In a recent Monetary Policy Committee (MPC) meeting, Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted the need for caution against another inflation surge. The meeting, held from October 7 to 9, unveiled a strategy to shift from a withdrawal of accommodation to a neutral monetary policy stance.

Das noted that while India's economy demonstrates resilience and stability, with strong growth prospects, the inflation dynamics necessitate careful monitoring. He indicated that despite minor inflation spikes recently, headline inflation is likely to align with the target in the coming months, warranting a flexible approach.

Amid global economic challenges and domestic uncertainties like food price volatility, Das emphasized the importance of a stable monetary policy to fuel sustainable growth without triggering inflationary pressures. The RBI aims to keep the policy repo rate unchanged at 6.50 per cent, prioritizing price stability alongside economic growth.

(With inputs from agencies.)