Price stability is the best contribution that monetary policy can make to strengthen the foundations of the aspired trajectory of growth over the next few decades, said Michaeal Patra, Deputy Governor, Reserve Bank of India (RBI) speaking at the Mid-Career Training Programme for officials of the Indian Administrative Service at the Lal Bahadur Shastri National Academy of Administration, Mussoorie.
“The formation of inflation in India needs to be navigated towards convergence with global inflation so that both the internal and external value of the rupee is preserved,” Patra said.
“This will prepare the ground for the internationalisation of the rupee and the emergence of India as the economic powerhouse of the world of tomorrow,” Patra added.
The RBI has kept the interest rates steady for eight consecutive monetary policies citing persisting risks to inflation.
The consumer price index based retail inflation rose to four month high of 5.08 percent in June compared with 4.75 percent in the previous month as food inflation rose to 9.4 percent.
Inflation had dipped to a 12-month low of 4.75 percent in the previous month, despite food inflation hovering around 8.7 percent.
June marks the eighth consecutive month of over 8 percent inflation, data released on July 12 showed.
Sequentially, consumer price index, which is used to measure food inflation, was up 1.33 percent compared with the previous month, with food prices rising 3.17 percent in June.