‘We’ll be nimble-footed on commodity prices’ – Times of India


MUMBAI: The Ukraine battle has upset forecasts made by the RBI in its February 2022 coverage. In his first offline interplay with media after the pandemic, governor Shaktikanta Dassaid that the RBI was forward of Western central banks in discontinuing bond purchases and that nobody can forecast the place commodity costs together with crude oil shall be.
Is the RBI anxious about inflation given the rise in world commodity costs?
Wehave to be watchful about world commodity costs. Oil costs are fluctuating and it is vitally tough to say which manner they may transfer. But we shall be nimble-footed and all our actions shall be tailor-made.
Have you ever included any authorities measures on the provision facet whereas making inflation forecasts?
It is just when measures are taken that they’re factored in. We’ve not anticipated any measures in our projections. We’re taking the scenario because it prevails in the present day, domestically and globally. We’ve taken into consideration the worldwide crude oil costs at $100 per barrel, and for gas now we have taken the pre- vailing costs whereas making our assessments for each progress and inflation.
Why did RBI introduce the standing deposit facility to soak up liquidity as a substitute of utilizing reverse repo?
The SDF provides us higher flexibility in implementing the coverage targets. It’s uncollateralised and we aren’t constrained by the inventory of liquidity that now we have or we don’t have for numerous liquidity administration operations. It’s also an instrument of economic stability. It allows us to sterilise extra liquidity with out the constraint of collaterals. The reverse repo shall be activated after we see a necessity for it.


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