Tolerance towards high inflation during pandemic was necessary: Shakikanta Das

Addressing criticism of the Reserve Bank of India (RBI) being behind the curve by continuing with the accommodative monetary policy stance longer than other countries, apex bank Governor Shakikanta Das stated that tolerance of high inflation during the pandemic was a necessity. According to him, any move to prematurely tighten monetary policy would have been disastrous for economic growth. The RBI’s mandate is that of flexible inflation targeting where it is required to take care of both price rise and growth, especially in extraordinary situations. Das further stated that the current high levels of retail inflation above seven per cent levels are largely on account of the war in Ukraine, adding that early withdrawal of accommodation or rate increases by the RBI would have not helped prevent the spike in inflation.