'RBI may struggle to meet 4% inflation target': Economist flags fastest money, credit growth since 2012 13
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Economist Tantri said the RBI may struggle to meet its 4% inflation target as money and credit growth hit levels not seen since 2012–13.
- ✓Data for October 31 showed broad money grew 16.5% and commercial credit rose 19.4%.
- ✓Experts now expect October retail inflation to approach 6% this Thursday.
Story at a Glance
- Category
- Indian Markets
- Reported By
- Business Today
- Reading Speed
- 2 Minute(s)
- Market Focus
- India Economy
Citing RBI data for October 31, Tantri said currency in circulation increased 14.2% year-on-year, while cash held by the public rose 14.7%. Broad money growth accelerated from 16% to 16.5% in just a fortnight.
Bank credit to the commercial sector grew 19.4%, compared with 11.2% a year earlier.
"No financial year since 2012–13 has ended with broad money and credit growing this fast together. Even in the pandemic year of 2020–21, broad money grew 12.2% and commercial credit about 6%," Tantri wrote in a post.
The professor questioned whether inflation could return to the RBI's medium-term target with money and credit expanding at the current pace. "At this pace, I find it hard to see how the RBI meets its 4% inflation target even in the medium term, let alone the short term," he said.
Unlock the Full Story with ArthNow Premium
To continue reading this complete financial story and in-depth market context, upgrade to ArthNow Premium. Enjoy unlimited access across Web and Mobile.
Business Today
Read the full, original unfiltered story directly on the publisher's portal.
This brief is for information only and is not investment advice. ArthNow is not a SEBI-registered investment adviser and does not publish buy or sell recommendations. Original reporting is credited to the publisher named above. Read our editorial policy or report an error.