Anil Singhvi speaks on Fed policy and how India managed inflation well

Zee Business Managing Editor Anil Singhvi on Thursday heaped praise on the Reserve Bank of India (RBI) for actively taking measures to tame inflation in the country. Explaining the US Federal Reserve's decision to hike interest rate by 75bps -- the third time in a row, he said that the hike was on the expected lines for 80 per cent of people.

Singhvi also said that another hike of 1.25 per cent is on the cards as he said that Fed in the upcoming meeting could again hike the policy rate by 75 bps and then 50 bps. Next year in February, he said that the Fed could hike the rate by approximately 0.25%- 0.5%. This, he said, is just an expectation and could change with the evolving circumstances.

He said that after the latest hike, the benchmark short-term rate is now 3.25 per cent in the US whereas the inflation rate is 8.3 per cent which means that there is a 5 per cent negative interest rate. 

Notably, the rate hike affects consumer and business loans directly, thus the economy. 

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कल US #FedPolicy में क्या हुआ?

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#India में क्या है महंगाई की स्थिति?

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He said that the Indian economy is in a good position than others. Of course, there is inflation but interest rates are already high. Our inflation rate is at 7 per cent and the benchmark interest rate is at 5.40 per cent.

He said that India is the only country among big countries where the real interest rate is just 1.5-1.6 per cent in minus. This shows that India has managed the inflation level and interest rate in the best possible manner.

He also referred to the RBI's decision to hike the policy rate in May and commended RBI Governor RBI Shaktikanta Das for his proactive decisions to bring the inflation rate below the tolerance level.

The retail inflation based on Consumer Price Index (CPI), which RBI factors in while arriving at its monetary policy, is above 6 per cent since January 2022.