South Asia's dependency on fossil fuel imports rendered it vulnerable to imported inflation
Governor Shaktikanta Das of the Reserve Bank of India (RBI) stated today that bringing inflation under control is one of the most important policy concerns for South Asian nations.
For successful disinflation, credible monetary policy actions accompanied by targeted supply side interventions, fiscal, trade policy and administrative measures have become the key instruments.
“While the recent softening of commodity prices and supply chain bottlenecks should help in lowering inflation going ahead, risks to growth and investment outlook may rise if inflation persists at high level. Prioritising price stability, may therefore, be the optimal policy choice in the current context for the region,” Das stated.
Speaking at the launch of a book by the International Monetary Fund (IMF) in the Capital, Das stated that the region’s dependency on fossil fuel imports rendered it vulnerable to imported inflation.
In addition to inflation, the Governor presented six policy goals for the South Asian area to address key difficulties posed by Covid, inflation, tightening financial markets, and the Russia-Ukraine war.
These included reducing the region’s exposure to external risks, boosting productivity, enhancing collaboration for the purpose of ensuring energy security, collaborating on environmentally friendly energy projects, and promoting tourism.