RBI MPC Meeting: After the three-day long Monetary Policy Committee meeting of the Reserve Bank of India, Governor Shaktikanta Das announced the decision taken in this meeting in which there was no change in the repo rate and it has been decided to keep it at 6.50 percent. But during the RBI Governor’s speech, he repeatedly mentioned the word ‘horses’. While announcing the earlier monetary policy, he has repeatedly mentioned the elephant. In such a situation, this question must be arising in your mind that why is the RBI Governor repeatedly taking the names of elephant and horse and whom is he addressing by saying this?
Who is elephant-horse?
By elephant and horse, RBI Governor Shaktikanta Das meant the high inflation rate that has been troubling Ukraine and Russia ever since it began in February 2022. Food inflation has robbed people of their hard-earned money. To control inflation, after May 2022, RBI increased its policy rates repo rate from 4 percent to 6.50 percent. After this step of RBI, the retail inflation rate in July and August of the current year has remained below the RBI tolerance band of 4 percent. But the RBI Governor fears that this horse of inflation may jump again and run away, due to which there is a need to be cautious.
Whom did the RBI Governor call a horse?
Earlier, whenever Governor Shaktikanta Das was asked a question regarding reduction in interest rates after the decline in inflation, he used to say in his answer that the elephant is in the room, which is the most important issue in front of the Central Bank. It is a big challenge. And by Elephant he meant high inflation rate. But on October 9, 2024, when the RBI Governor read his statement after the Monetary Policy Committee meeting, he said that he has now started calling inflation a horse and not an elephant.
Why is the Governor afraid of the horse jumping?
When the RBI Governor was questioned about this in the press conference after the announcement of the monetary policy, he said, earlier I had used an elephant, now I am using a horse and in war both elephants and horses are used. The RBI Governor has always been saying that the war against inflation is not over yet. And even today he said, inflation has definitely come down but due to global tension, there remains a risk of rise in commodity and food prices. The RBI Governor said, there is a need to be extremely cautious in the war against inflation and hence he said, the horse may jump again.
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