India is working to rein in inflation that is “slightly above” a tolerated level, Finance Minister Nirmala Sitharaman said.
(Bloomberg) — India is working to rein in inflation that is “slightly above” a tolerated level, Finance Minister Nirmala Sitharaman said.
“Today we have an inflation which is slightly above the tolerance limit, but which is constantly being worked at so that it can be brought down,” the minister said in a speech at a college in Bengaluru in Karnataka state on Saturday.
India’s latest retail inflation fell within Reserve Bank of India’s target range of 2%-6% in March after two consecutive months of consumer price gains that were above 6%. Prices have eased since last year’s high of 7.79% in April 2022, prompting the central bank to undertake a series of interest rate increases that has led to slower demand in Asia’s third largest economy.
The latest print reinforces a move by the RBI to keep its policy unchanged in order to assess the cumulative impact of 250 basis points in total rate increases since May last year.
Sitharaman said the Indian economy has come out of the pandemic without much of a bruise due to the government’s balanced policy making. This added to the stability of the Indian rupee and the way it is being managed has given recognition to the currency with at least 19 countries allowing rupee transactions for trade, she said.
India has been attempting to internationalize the rupee not just to reduce its own dollar demand, but also offer its currency as an alternative for trade to countries that are facing a shortage of dollars.
“If you can do a payment in rupee abroad, the government has done a lot of background work to get that done,” Sitharaman said. “It wouldn’t have been possible otherwise.”
(Updates with more of Sitharaman’s comments from fifth paragraph)
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