Nirmala Sitharaman On Inflation: RBI needs better coordination to handle inflation - Finance Minister Nirmala Sitharaman

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Newz Fast, New Delhi: The Finance Minister said, 'RBI will have to adjust to some extent. This coordination may not be as strong as it is in other western developed countries. I am not telling anything to the Reserve Bank.

Finance Minister Nirmala Sitharaman said on Thursday that the RBI will have to better coordinate with fiscal policy and other factors to control inflation.

In an event organized by economic think-tank ICRIER, he said that inflation management cannot be left to monetary policy alone.

Need to adjust to some degree
The Finance Minister said, 'RBI will have to adjust to some extent. This coordination may not be as strong as it is in other western developed countries. I am not telling anything to the Reserve Bank.

I am not giving any further instructions to RBI, but the truth is that monetary policy has to work along with fiscal policy to handle India's economy.

Interest rate management only tool
He said there are economies where policy is designed in such a way that monetary policy and interest rate management are the only instruments to control inflation.

Sitharaman said, "I would say that India's inflation management is a combined exercise of many different activities and most of which are outside monetary policy in today's circumstances."

Earlier, the Finance Minister had said that gradually the rate of inflation is decreasing as compared to earlier. He said inflation has come down to affordable levels.

This is the reason why the country's economic growth remains the priority. Inflation came down to 6.71 per cent in July on softening food prices, according to official data.

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