Stronger policy frameworks and robust macro fundamentals remain the key to resilience and fostering overall macroeconomic stability, according to RBI Governor Sanjay Malhotra.
In the Monetary Policy Committee (MPC) meeting held earlier this month, the minutes of which were released by the central bank on Friday, Malhotra said that domestically too, there is a need to preserve the high growth momentum, while maintaining price stability, necessitating monetary policy to use various policy instruments to maintain the inflation-growth balance.
Headline inflation, after moving above the upper tolerance band in October, has moderated in November and December.
"Going forward, food inflation pressures are likely to see significant easing on robust kharif harvest arrivals, winter season correction of vegetable prices and a promising rabi crop outlook," said Malhotra.
The food inflation outlook is turning decisively positive. Moreover, the budget proposals on agriculture and the commitment to fiscal consolidation, among others, are positive for price stability and would help to anchor inflation expectations over the medium term, he said.