Will strive to get CPI down to 4%; El Nino a challenge for food inflation, says Shaktikanta Das

Governor Shaktikanta Das has said the Reserve Bank will strive to get headline inflation to its 4% target but flagged El Nino as a challenge to its efforts. In an exclusive interview with PTI Bhasha at his office in Mumbai, Mr. Das exuded confidence that the economy will grow at 6.5 % in FY24, as estimated by the RBI earlier. 

Governor Shaktikanta Das has said the Reserve Bank will strive to get headline inflation to its 4% target but flagged El Nino as a challenge to its efforts.

In an exclusive interview with PTI Bhasha at his office in Mumbai, Mr. Das exuded confidence that the economy will grow at 6.5 % in FY24, as estimated by the RBI earlier. 

The central bank's rate hikes by a cumulative 2.50% since May last year, coupled with supply-side measures from the government, have helped get the inflation down to 4.25% in May from a peak of 7.8 per cent in April last year, Mr. Das said.

“We continue to be watchful on the inflation front. We expect inflation to be at 5.1% in FY24, and we will continue to strive and get it down to 4%,” he added.

On the high borrowing costs, Mr. Das said interest rates on loans may have a direct relation with inflation, and if inflation cools down on a durable basis, people can expect lower interest rates on loans. 

The governor explained that the Russia-Ukraine war, which led to a shoot-up in the commodity prices, led to a surge in inflation, but added that crude prices are not a concern from an inflation perspective now as they've come down to $76-76 a barrel.

Food inflation has also come down, Mr. Das said, adding that measures like the Food Corporation of India releasing wheat and rice stocks have also helped.