How the fall in commodity prices helped India to escape the global inflation trap, what RBI said?

Highlights

The Reserve Bank has released its latest ‘State of the Economy’ report.
The great thing is that inflation is coming down from its upper level.
The US inflation rate rose to a 41-year high of 9.1 percent in June.

New Delhi. Along with the world, India is also troubled by rising inflation. Inflation remains above the upper limit set by the Reserve Bank. All eyes are on it that when will inflation i.e. inflation be reduced. However, the fall in commodity prices for the past few days has indicated some relief. On this, the Reserve Bank of India (RBI) has said that the Indian economy can escape the trap of global inflation. If commodity prices continue to soften in recent weeks. At the same time, the pressure on the supply chain also comes down.

The central bank has said in its latest ‘State of the Economy’ report that the big relief for us is that inflation is coming down from its upper level. However, it is still above our upper limit. RBI said that the response to monetary policy is also being received.

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Inflation expected to come down further
RBI Governor Shaktikanta Das recently said that inflation is “likely to moderate gradually in the second half of 2022-23. Therefore, the chances of very aggressive monetary policy in India will be reduced. Earlier, Deputy Governor Michael Patra had also said that there were signs of inflation peaking. Therefore, there is no need for a rigid policy to control the prices.

having a bad time
In the report of the Reserve Bank, it has been said that if the visible fall in the prices of commodity prices i.e. gold, silver, metals and other commodities continues in the recent weeks. Also, if the pressure on the supply chain eases, the worst inflationary phase may be left behind. Then we can take advantage of the improving supply.

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International environment very difficult
The US inflation rate rose to a 41-year high of 9.1 percent in June. India, on the other hand, recorded retail inflation of 7.01 per cent in June, up from 7.04 per cent in May and 7.79 per cent in April. In the report, RBI has said that the international environment is very difficult. We are continuously monitoring the trade deficit. We are working on reducing external debt despite a strong reserve buffer.

Tags: economy, inflation, RBI, Rbi policy, Supply Chain

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