Agency, New Delhi.
Published by: Jeet Kumar
Updated Thu, 10 Mar 2022 06:17 AM IST
Summary
Raghuram Rajan said that the central bank of India has a directive and it has also lived up to it. During the pandemic, instead of increasing interest rates, preference was given to moderate inflation.
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Expansion
Rajan said that the objective of neither the government nor the RBI would be fulfilled if the war against inflation is lost. It is important for any central bank to respect the instructions from the government. The central bank of India has a directive and it has lived up to it, he said. During the pandemic, instead of increasing interest rates, preference was given to moderate inflation.
RBI has been directed to keep inflation at 4 per cent level, with a possibility of two per cent being more or less. “Like any other central bank, we too have to address when new challenges arise,” he said. Otherwise, it will not be good for the economy.
Inflation reaches high in many parts
Asked whether the current inflation situation in India is a temporary setback, he said the situation is above the already high levels of inflation in many parts of the world. Thus war has an additional effect, leading to inflation.
Digital currency will increase transactions
The central bank digital currency proposed by RBI will improve the speed of transactions. This will help in reducing the cost of cash. The world’s central banks are in various stages of introducing their own national digital currencies, Deloitte said.