Minister of Finance Nirmala Sitharaman said that the increase in new interest rates by the bank reserve was not surprising for him but the time was, stating that the increase in funds would not have an impact on the investment of the infrastructure planned by the government.For the first time since August 2018, RBI on May 4 gave a blunt 40 basis points increase in the main repo level to 4.40%, and also raised the cash reserve ratio by 50 basis points to 4.5% after the tariff determination meeting that was not scheduled The panel, quoting an increase in inflationary pressure after the Ukraine War and the surge in crude oil prices produced.
Retail inflation was printed at 6.9% in March and April reading is estimated to reach 7.7%.When the increase in RBI interest rates came as a surprise but not the action itself because people think it should be done. That was surprising because it was between two MPC meetings (Monetary Policy Committee). But Fed As has said it all this time, “said Ms. Sitharaman in his first reaction to the increase in pace while attaching an event on Saturday night in Mumbai.He said that in the last MPC meeting, RBI gave an indication that it was time for them to also act, and the increase was part of the actions synchronized by the main central banks throughout the world.
“On the one hand, it is a synchronized action. Australia did it, and the US did it that night. So, I see a greater understanding between the current central banks. But an understanding of how to deal with recovery from Pandemi is not entirely unique or typical only for India. This is a global problem. “”And even when we handle recovery, inflation, which is really festering, and festering in some of the highest that cannot be trusted, say in the US and Britain, not so much in our country … Still, the challenge of recovery versus inflation seems It seems that inflation seems to follow certain templates that exist throughout the world now, “he said.
However, he quickly stated that the central bank’s decision would not have an impact on the large infrastructure investment planned by the government which reached tens of billions of dollars.In economic sanctions against Russia after an invasion to Ukraine, he said the blockade “limits us” because traditional buyers from Russia shifted to sources from Indian crude oil baskets, 80-85% of them originating from the Middle East. This shift is likely to provide more pressure on the price of Indian crude oil baskets.
“Sanctions have caused people to rush to alternative sources in which countries like us have existed for decades. Now suddenly it will be crowded with more people who want to buy the same thing. So, the supply and price factors will now overcome us, “he said, explaining that India will continue to buy crude oil from anywhere available cheaply.”In matters related to our oil consumption and bought it from sources that gave us the concession rate, we have confirmed our rights in doing that. We have explained that we will definitely buy it, so that is something that hasn’t been said for the first time. We will continue with what is good for us. We need cheap fuel. If available, why don’t we want to buy it?, “He said.
Ms. Sitharaman said even before the war, there was an increase in fertilizer prices. The government must look for additional expenditure approval during additional demands due to the method of crude oil playing and rising commodity prices due to supply disruption.