RBI Ready to Intervene as Governor Malhotra Warns of Fuel Price Hike, Says ‘Only a Matter of Time’
RBI Governor Sanjay Malhotra warned that a retail fuel price hike is "only a matter of time" if the Middle East conflict persists. Speaking in Switzerland, he stated that while the RBI can look through temporary shocks, it will intervene if inflation becomes entrenched.
- Republic Business
- 1 min read
India's monetary policy can look through temporary supply shocks but may intervene if inflation pressures become entrenched following the Iran war-driven oil price spike, central bank Governor Sanjay Malhotra said.
Malhotra was speaking at a conference in Switzerland late on Tuesday. Some of his comments are below:
* The government may need to hike fuel prices if the conflict in the Middle East drags on.
* The government has followed fiscally prudent policies so it is "only a matter of time" before higher oil prices are passed on more fully.
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* Important for fiscal and monetary policy to coordinate at this time.
* At its April monetary policy review, RBI decided to wait and watch. It was "early days" then. Monetary policy will need to remain nimble and flexible.
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* Central banks need to be cautious, follow a policy of "gradualism" in the face of heightened uncertainty.
* RBI is being more and more data-dependent, taking it meeting by meeting. (Reporting by Ira Dugal)