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Center rules out making public RBI inflation breach report

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It was the first time since the MPC came into force that RBI had to give an explanation. (Case)

New Delhi:

The government today ruled out making public the RBI report detailing the reasons why the central bank could not keep inflation within the targeted upper limit of 6% for the three consecutive quarters.

“Yes Sir, RBI has provided a report to the Central Government in accordance with Section 45ZN of the RBI Act 1934 and RBI Monetary Policy Committee Regulation 7 and Monetary Policy Process Regulation 2016”, said Minister of State for Finance Pankaj Chaudhary. in a written response.

The said provisions of the RBI Act 1934 and its regulations do not provide for the publication of the report, he said.

Average inflation was above the inflation target’s upper tolerance level of 6% for 3 consecutive quarters from January to September 2022.

In the January to March quarter the average inflation was 6.3%, from April to June it was 7.3% and it dropped to 7% in the September quarter.

It was the first time since the monetary policy framework came into effect in 2016 that RBI had to give an explanation to the government.

Retail inflation based on the consumer price index (CPI) has remained above 6% since January 2022. It was 7.41% in September. The six-member MPC, headed by Governor Shaktikanta Das, takes retail price inflation into account while deciding bimonthly monetary policy.

Since May, the RBI has raised the short-term lending (repo) rate by 2.25 basis points, taking it to an almost three-year high of 6.25%.

In August 2016, the central government notified CPI inflation of 4% as a target for the period August 5, 2016 to March 31, 2021 with an upper tolerance limit of 6% and a lower tolerance limit of 2%.

On March 31, 2021, the central government retained the inflation target and tolerance band for the next five-year period from April 1, 2021 to March 31, 2026.

In response to another question, Pankaj Chaudhary said that the surge in international commodity prices and the supply and demand imbalances induced by the pandemic have caused an increase in the rate of inflation around the world, including in India.

The Russian-Ukrainian conflict has exacerbated inflationary pressures on crude oil, gas, metals and edible oils (sunflower), he said.

In addition, he said, the onset of heat waves and erratic rainfall in the latter part of the monsoon season led to crop damage and higher vegetable prices. Recently, the inflation rate fell to 6.77% in October 2022.

The price situation of major essential commodities is monitored regularly by the government and corrective measures are taken from time to time, he said, adding that several supply-side measures have been taken by the government. to fight inflation and ensure that the poor do not have to bear the additional financial burden.

These included a reduction in excise duty of Rs 8 per liter on petrol and Rs 6 per liter on diesel on 21 May 2022, a ban on the export of wheat products, the imposition export duty on rice, reduction of import duty and tax on legumes.

In response to another question, he said, India’s foreign exchange reserves stood at $607.31 billion as of March 31, 2022 and they declined from $74.65 billion to $532. $66 billion as of September 30, 2022.

“The changes in foreign exchange reserves are mainly due to the revaluation of foreign currency assets to reflect current global market conditions and due to market intervention operations by the Reserve Bank of India to smooth volatility in exchange rates. change,” he said.

On Sukanya Samriddhi Yojana, Pankaj Chaudhary said, the number of people benefiting nationwide from the launch of the scheme till October 31 is 31,82,568.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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