The level of retail inflation in the country has put the common man in a bad condition. At the same time, this work is becoming challenging for the monetary policy made by the Reserve Bank of India to control inflation. Deputy Governor Michael Patra himself has given the reason for this.
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retail inflation in the country (Retail Inflation in India) It has remained at its high level for a long time. This constant Reserve Bank of India (Reserve Bank of India) It is running above the target and because of this the life of the common man is becoming difficult. But do you know that in order to control inflation, RBI (RBI) which monetary policy (Monetary Policy) Makes it, now it is also becoming difficult for him to prepare it. Central Bank’s Deputy Governor Michael Patra has also given the reason for this.
Difficult to make monetary policy at present
According to the news of the agency, Michael Patra, Deputy Governor of the Reserve Bank of India, says that in the present time, preparing monetary policy has become a very challenging task. He said that the volatile environment, delay in data and their frequent reviews have made it difficult to formulate monetary policy.
Explaining this, he said that in the first week of December, the Monetary Policy Committee (Monetary Policy Committee) There will be a meeting, after which the next monetary policy review will be presented. To discuss this, where the inflation data of October will be needed, it will also depend on the economic growth data of the July-September quarter on 30 November.
Inflation and monetary policy connection
Patra was speaking at the annual conference of SBI. He said that monetary policy should be concerned with the future. This is because when the policy rate changes, it affects the loan interest rates. But it takes a long time for its effect to reach the demand in the economy. So we can only target future inflation, not tomorrow.
He said that on the basis of one month and three months old data, RBI has to analyze how much is the inflation and how the pace of growth is going to be. Patra has the responsibility of overseeing the monetary policy of the RBI.
Russia-Ukraine war, global inflation affected
Patra says that Russia-Ukraine war (Russia-Ukraine War) Along with this, the jump in oil and food prices are big shocks to the economic growth. Monetary policy has to face them after the release of official data. Delays in data make this difficult, so does the risk of frequent revisions and, sometimes, drastic changes in data.
Patra said in a lighter vein that if the NSSO has the right to modify the figures. If companies can change their earnings figures, then they should also have the right to change the interest rate of September (previous monetary policy).
By the way, let us tell you that RBI has also started Artificial Intelligence and Machine Learning based analysis recently.
English Headline: RBI deputy governor says delay in data creates problem in making of monetary policy which curb inflation.