NEW DELHI: Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, said that the Reserve Bank of India's Monetary Policy Committee (MPC) will act responsibly to keep inflation within an acceptable range.
Sanyal said in press briefing that "Retail inflation in our country is 7 percent . We do keep an eye on this with some caution. I do want to bring out that, even in wealthy nations like the US, UK, and so on, inflation is generally higher in other nations than it is in the United States."
Sanyal noted that there are several nations where inflation is significantly greater, and in certain situations, it is even feared to reach double digits. For instance, UK inflation could be as high as 18–20 percent , which is extremely significant. There are developing markets, such as Turkey, where it is between 60 percent and 70 percent . Therefore, in that perspective, I would conclude that the MPC and the Finance Ministry are doing a decent job managing the 7 percent inflation rate, he added.
"This does not imply that we do not keep a close eye on this figure, however, as the anchoring of inflation was fought for throughout the period from 2017 to 2019 when the inflation targeting framework was implemented. Under no circumstances do we want this to be unanchored. Therefore, I'm certain that the Monetary Policy Committee will consider this and take appropriate action to maintain inflation in a reasonable range" he added.
The Finance Minister stated last week that monetary policy alone cannot control inflation because it has "proven absolutely useless in many nations." Instead, fiscal and monetary policies must coordinate to keep prices from rising out of control. She added that one of India's strategies for controlling inflation included acquiring Russian oil.
Sitharaman stated at an event hosted by the Indian Council for Research on International Economic Relations that "India's inflation management is an exercise of so many diverse actions, the majority of which are outside of monetary policy even in today's circumstances."
The Reserve Bank of India (RBI) will have to "slightly" synchronise its monetary tightening activities with other central banks, finance minister Nirmala Sitharaman said earlier, but not to the same extent that other western industrialised nations would.
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