Too early to revise 4% inflation target: Das (2024)

MUMBAI: Reserve Bank of India Governor Shaktikanta Das on Friday said it’s too early to revisit the inflation target of 4% with 2% deviation despite the central bank failing to keep it below 6% for three consecutive quarters.

“Our target of 4% gives us sufficient flexibility. It’s too early to shift the goalposts," said Das at the Business Today Banking Summit. “RBI’s target of 4%, plus or minus 2%, gives us sufficient flexibility in our monetary policy decision making. The MPC (monetary policy committee) utilises this flexibility in inflation targeting framework to tolerate a higher inflation rate of even up to 6%," he added.

Retail Inflation eased to 5.72% in December from 5.88% in the previous month, mainly due to softening of food prices. However, core inflation remained around 6.3%, which continues to be an area of concern, according to Das.

“Core inflation remains sticky around 6% and that is not a comfortable number to deal with," he said. “Arjuna’s eye has to be kept on core inflation."

Das also reiterated that cryptocurrency trading should be banned in the country as it is completely based on speculation and is similar to gambling.

While the blockchain technology needs to be supported because of its various applications, he believes that cryptocurrency does not have any underlying value.

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ABOUT THE AUTHOR

Gopika Gopakumar

Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.