Shaktikanta said, ‘Globally, price growth targets may be revised or reduced. But, now is not the time to change the target in India.’
He blamed the wholesale price of the product for this. In his words, ‘The wholesale price of the product is a matter of concern. This number is not at all comforting. RBI should continue to monitor wholesale price inflation gradually. Right now we should give more importance to wholesale price increase.’ Incidentally, retail price inflation in December fell to 5.72 percent from 5.88 percent in November, which is within the RBI’s comfort zone. However, wholesale price inflation was around 6.31 percent during the same period.
If the central bank does not take appropriate action, the rate hike may increase, Shaktikanta said. While keeping inflation in check may reduce the national growth rate, each central bank has to make decisions based on economic conditions, he said. The RBI Governor is also optimistic that borrowing by large companies in the country will increase in the coming days.