The Reserve Bank of India (RBI) and the Centre are prepared to take further action to curb the price rise amid the ongoing global turmoil, minister of state for finance Pankaj Chaudhary told Parliament on July 19.
The Russia and Ukraine war has led to global supply disruptions, resulting in a steep increase in commodity prices, including those of crude oil, gas, edible oils and fertilisers.
The Centre was closely monitoring the global price movements and their impact on India’s economy through trade, Chaudhary said in a written response to a question in the Rajya Sabha on Day 2 of the monsoon session of Parliament.
“Recently prices of various commodities including edible oils, metals and crude oil have stabilised. Many central banks, including Fed, have also tightened their monetary policy to tackle inflation. The RBI and the government are closely monitoring the situation and stand ready to take appropriate action,” he said.
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India’s inflation has been above the central bank's target of 4 percent for 33 months and has stubbornly remained above the upper bound of the 2-6 percent tolerance range for six straight months.
The country imports 85 percent of its crude oil needs and also a variety of other goods, including electronics and gold, which have been adding to a widening current account deficit.
The rupee has been slipping to record lows in a downward spiral and fell below 80 to a dollar on July 19 and there are fears of the Indian currency sliding even further.
The RBI and government have already taken several steps to curb inflation. While the central bank has raised interest rates sharply in recent months, the government has curbed exports of key food items including wheat and cut duties on fuel to cool prices.
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