NEW DELHI (Reuters) – India’s retail price inflation is expected to fall below 7% in October from 7.41% in September, Reserve Bank of India Governor Shaktikanta Das said on Saturday.
Inflation is a major challenge for India but the central bank and government have taken several measures to deal with it effectively over the last several months, Das said at the HT Leadership Summit in New Delhi.
A Reuters poll forecast retail price inflation to slow in October to 6.73%, due to weaker food price rises and a strong base year-on-year, but to remain stubbornly above the 6% upper limit of the central bank’s tolerance band.
The data will be released at 1200 GMT on Monday.
“Overall India’s macroeconomic fundamentals remain strong and resilient,” Das said.
The medium-term inflation target should continue to be held at 4%, he added.
“If it (inflation) remains above 6% for a prolonged period, it will be detrimental to growth, hence 6% has been kept as the upper tolerance band,” he said.
Das said it was too early to get into a debate about whether inflation is likely to stay higher for longer.
The change in inflation target could indicate that the central banks are less committed to “fight the war against inflation. It’s too early to enter into that debate,” he said.
(Reporting by Swati Bhat and Shivangi Acharya; editing by Clelia Oziel)
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