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More policy space can be created only when inflation eases, says MPC member

Inflation is being driven by supply-side problems and is likely to stay elevated for a while, Mridul Saggar said

RBI, reserve bank of india
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His comments come days before the inflation-targeting Monetary Policy Committee’s next interest rate decision on Dec. 4

Anirban Nag | Bloomberg
The Reserve Bank of India has cut interest rates by “a great deal” and more policy space can be created only when inflation eases, its executive director and rate-panel member Mridul Saggar said.

Inflation is being driven by supply-side problems and is likely to stay elevated for a while, he said at the Emerging Markets Central Banking Summit organized virtually by the Washington-based Institute of International Finance. Although food prices -- which contribute significantly to India’s inflation basket -- are expected to correct significantly by December, he said it isn’t easy to bring prices down under pandemic conditions.

His comments come days

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First Published: Nov 25 2020 | 8:48 AM IST

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