Impact Of Monetary Policy Tightening On Inflation To Be Felt After 5-6 Quarters

50

New Delhi: RBI Monetary Policy Committee (MPC) member Jayanth R Varma on Monday said that the impact of monetary policy tightening on inflation will be felt after five to six quarters.

The central bank is mandated to keep inflation at 4 per cent with 2 per cent of upside and downside margins.

In order to control rising inflation, the RBI on September 30, has raised short-term lending rate for the third consecutive time by 50 bps to take the repo rate to 5.9 per cent.

Since May it has cumulatively increased the key interest rate by 190 bps.

“No doubt it (inflation) will come down. Because we have done monetary policy tightening.

“That tightening will have its impact. The monetary policy takes, you know, five to six quarters to have its impact and cool prices,” he told PTI in a telephonic interview.

India’s consumer price index (CPI) based inflation in September rose to five-month high of 7.41 per cent from 7 per cent recorded in the preceding month, with the print remaining well above the upper tolerance level of RBI’s inflation targeting framework for the ninth consecutive month.

Comments are closed.

Breaking