Interest rates are likely to remain high for some time: RBI

New Delhi: Interest rates arelikely to remain high for some time,Reserve Bank governor Shaktikanta Das said, stressing thecentral bank will remain extravigilant to ensure a sustaineddecline in inflation. The lendingrates are ruling high after the RBIcumulatively hiked the key policyrate (repo) by 250 basis pointssince May 2022 in a bid to tameinflation which touched a high of7.44 per cent this July.The consumer price index (CPI)based retail inflation is nowdeclining and fell to 5 per cent inSeptember. The government hasmandated the central bank toensure inflation remains at 4 percent with a margin of 2 per cent oneither side.”Interest rate will remain high.How long they will remain high, Ithink only time and the way theworld is evolving will tell,” thegovernor said in response to aquery at an economic conferencehere. Responding to queries on theimpact of the crisis in West Asia,the governor said that in the lastfortnight, US bond yields haverisen, which has widerimplications for other economies.Crude oil prices have also gone up.”Some of these uncertainties werethere, but they have become morepronounced in some sense. What
is different in the context of India,we are impacted by whatever ishappening all over, no doubt aboutthat. But our macroeconomicfundamentals continue to besound.” The members of theReserve Bank of India’s (RBI)monetary policy committee(MPC) reiterated their fightagainst inflation and said that anymore monetary policy action will
be data dependent, minutes of theirthree-day meeting held fromOctober 4-6 showed. The interestrate
setting body had then left thepolicy repo rate unchanged at 6.50per cent for the fourth time in arow. The minutes showed RBIdeputy-governor MichaelDebabrata Patra saying thatinflation prints for September andOctober needed to be monitoredcarefully to look out for themoderation that its projections
anticipate. “If we tame inflationdurably, we will prepare theground for a long innings of strongand stable growth. Our projectionsanticipate that growth will gatherpositive momentum from thesecond quarter onwards,” he said.

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