RBI To Not Release Letter On Inflation Response ‘Immediately’

Das said that the letter to be sent to the government would not be made public immediately because the bank does not have the authority to release it

The Reserve Bank of India (RBI) will not immediately release details of its report to the government explaining why it has failed to stick to its inflation mandate, RBI Governor Shaktikanta Das said on Wednesday.

The RBI’s Monetary Policy Committee (MPC) will meet on 3 November to discuss its first-ever inflation target miss.

Das said that the letter to be sent to the government would not be made public immediately because the bank does not have the authority to release it. However, he added that it would be released at some point later.

The central bank governor said that nothing in the law gives him the authority, privilege, and luxury of sharing privileged communication between the government and the central bank.

“Lot of discussion about why RBI is not releasing its letter to the government publicly. MPC minutes of the meeting are meant for the wider economy. The letter will be available to the public at some point,” Das said while speaking at an industry forum. 

“I ensure that transparency is not being compromised,” he added.

The committee is mandated to keep inflation within two percentage points on either side of its 4 per cent target.

If the threshold is breached for three straight quarters, the RBI must explain to the government.

September retail inflation rose to 7.4 per cent, the ninth straight month that it has remained above 6 per cent.

The RBI has raised interest rates by 190 basis points since May, but inflation remains stubbornly high.

Das said that he expects inflation to moderate, adding that curtailing price pressures sooner would have resulted in very high costs for the economy.

He also said that RBI is monitoring the impact of past measures on price trends.

(With inputs from Reuters)