Hindi English Translation || Editorial || Falling behind: On Monetary Policy Committee and inflation

Falling behind: On Monetary Policy Committee and inflation

Dissonance in RBI’s inflation messaging betrays (reveal, expose, disclose, lay bare, make known) risks in its policy posture

The Monetary Policy Committee’s (मौद्रिक नीति समिति) decision to hold benchmark interest rates level, while raising its forecast (पूर्वानुमान) for full-year GDP (सकल घरेलू उत्पाद) growth by 50 basis points (बुनियादी निर्देश) and flagging food price shocks-induced volatility (अस्थिरता) in inflation (मुद्रा स्फ़ीति), is replete with (से परिपूर्ण) the risk of policymakers falling behind the curve (below average; lagging behind other competitors) on anchoring (secure, fasten, attach, connect firmly) inflation expectations (अपेक्षा, उम्मीद). Notably (विशेष रूप से), after observing that “uncertainties in food prices along with unfavourable base effects (आधार प्रभाव) are likely (संभावित) to lead to (cause, bring on, bring about, result in, produce, give rise to)” headline inflation (it is a measure of the total inflation within an economy, including commodities such as food and energy prices) quickening (accelerate, step up, increase, surge, rise) in November-December, and that “recurring (happening or occurring frequently; constant, continuing, repeated) food price shocks are impeding (बाधा डालना, रोकना) the ongoing disinflation (decrease in the rate of inflation) process”, the MPC has rather surprisingly opted (choose, select, decide on, go for) to keep the RBI’s repo rate (it is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds) unchanged at 6.5% for a fifth straight bi-monthly (it means “once every two months” and it also means “twice a month) meeting. To be sure (certainly, without any doubt), retail inflation has moderated (reduce, lower, decrease, lessen, weaken) since the MPC last met in early October, with the headline reading (figure, indication, record, measurement) softening (decrease, reduction, lessening, moderation) by almost two percentage points (the difference between two percentages is termed as percentage point. (for example: “Interest Rates Jump From 10% to 12%”. In this case, the interest rate increased by “2 percentage points” or you can say that the interest rate is increased by 20%)), from August’s 6.83% to 4.87% in October. But, by the MPC’s own reckoning (गणना, हिसाब), that moderation (reduction, lessening, decrease, easing) may be fleeting (brief, transient, short-lived, short, momentary, sudden), as price gains (a general increase in the price of something) accelerate yet again in November and December, and with volatility in oil prices and financial markets, amid (in the middle of, surrounded by; during) heightened (enhanced, increased, intensified) global uncertainty (अनिश्चितता), there are added risks to the outlook on prices. The RBI’s latest ‘Households’ Inflation Expectations Survey’, undertaken (begin, start, commence, embark on) in November, reveals that most households (family, house) expect faster inflation in the three-months- ahead and one-year-ahead time horizons (limits, barriers, boundaries; range of experience, outlook, perspective, ambit, perception, purview), and at median (average, mean) levels of 9.1% and 10.1%, respectively, unequivocally (absolutely, explicitly, directly, clearly, categorically, conclusively, unconditionally, unqualifiedly, unambiguously) underlining the fact that (used to refer to a specific situation under consideration/discussion) price gain expectations are still far from (not, not at all; nowhere near, a long way from) durably (long-lastingly, strongly, permanently) anchored.

The dissonance (difference, variance, dissimilarity, contradiction, incongruity, discrepancy) in messaging from the central bank (the banking regulator of a county’s banking system. (e.g. The Reserve Bank of India (RBI) is the central bank of India)) is exemplified (show, demonstrate, display, illustrate, represent) in the MPC’s decision to upgrade its projection for real GDP growth in the fiscal (financial, monetary, budgetary) year ending in March 2024 to 7%, from 6.5% as recently as in October. For this, it cites (mention, refer to, point to, adduce, invoke, turn to, resort to) robust (strong, powerful) investment, besides continued strengthening (reinforcement, fortification, consolidation, buttressing, bolstering) in manufacturing, buoyancy (high level of activity, growth, development, progress, improvement, vigour/strength) in construction and a gradual rural recovery that it sees helping ‘brighten the prospects (possibilities, potential, expectations, outlook, future) of household consumption’. If the RBI’s cumulative 250 basis points increase in the benchmark (standard, base/basis, point of reference, criterion, ideal) interest rate since May 2022 through to February 2023 and the subsequent (successive, consecutive, continuous) retention (the continued possession & use of something) of the 6.5% rate have not damped the growth impulses (stimulus, fillip, impetus; urge, need, drive, desire) barring consumption, then it would indicate that consumption is still struggling to gain traction largely because, as Deputy Governor Michael D. Patra observed (say, remark, comment, mention, state, pronounce) at the MPC’s last meeting, “people are not increasing discretionary (optional, voluntary, subjective, up to the individual, non-mandatory, non-compulsory) spending in view of (because of, as a result of, considering, taking into consideration) high inflation”. This seems to be borne out in the RBI’s November round of its bi-monthly ‘Consumer Confidence Survey’, which showed consumers retained negative sentiments (feeling, emotion, point of view) on both current and future price conditions. With policymakers only too well aware that sans (without) price stability (steadiness, firmness, solidity, secureness, strength), as Mr. Patra noted, “the benefits of expanding GDP and employment will be frittered away by the erosion (decline, decrease, deterioration, disintegration, weakening) of purchasing power (the ability to buy something (goods/services))”, the MPC has its task cut out.

Courtesy: The Hindu

Important Word List With Meaning

1.fall behind (phrasal verb)

Hindi Meaning - पिछड़ना
English Meaning - trail, straggle, lag behind, move slowly.

2.monetary policy committee (MPC) (noun)

Hindi Meaning - मौद्रिक नीति समिति
English Meaning - it is a six-member panel that is expected to bring “value and transparency” to rate-setting decisions. It will feature three members from the RBI — the Governor, a Deputy Governor and another official — and three independent members to be selected by the Government. The MPC will meet four times a year to decide on monetary policy by a majority vote.

3.inflation (noun)

Hindi Meaning - मुद्रा स्फ़ीति
English Meaning - simply meaning “cost of living”; increase of price level of goods & services and vice versa decrease of currency value.

4.forecast (noun)

Hindi Meaning - पूर्वानुमान
English Meaning - prediction, indication, projection, prognosis, speculation, expectation, calculation (of future events or trends).

5.Gross domestic product (GDP) (noun)

Hindi Meaning - सकल घरेलू उत्पाद
English Meaning - a measure of economic activity in a country. It is the total value of a country’s annual output of goods and service.

6.volatility (noun)

Hindi Meaning - अस्थिरता
English Meaning - unpredictability, instability, unreliability.

7.replete with (adjective)

Hindi Meaning - से परिपूर्ण
English Meaning - filled with, overloaded, well supplied/stocked with.

8.expectation (noun)

Hindi Meaning - अपेक्षा, उम्मीद
English Meaning - calculation, forecast, projection, prediction, reckoning, estimation.

9.notably (adverb)

Hindi Meaning - विशेष रूप से
English Meaning - particularly, especially, markedly, significantly.

10.uncertainty (noun)

Hindi Meaning - अनिश्चितता
English Meaning - unpredictability, unreliability, riskiness/precariousness.

11.base effect (noun)

Hindi Meaning - आधार प्रभाव
English Meaning - it relates to inflation in the corresponding period of the previous year, if the inflation rate was too low in the corresponding period of the previous year, even a smaller rise in the Price Index will arithmetically give a high rate of inflation now.

12.likely (adverb)

Hindi Meaning - संभावित
English Meaning - probably, presumably, potentially, doubtlessly.

13.impede (verb)

Hindi Meaning - बाधा डालना, रोकना
English Meaning - hinder, obstruct, hamper, disrupt.

14.basis point (BPS) (noun)

Hindi Meaning - बुनियादी निर्देश
English Meaning - a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent). Used for measuring change in interest rate/yield.

15.reckoning (noun)

Hindi Meaning - गणना, हिसाब
English Meaning - calculation, estimation, computation.

16.monetary (adjective)

English Meaning - fiscal, financial, budgetary.

17.monetary policy (noun)

English Meaning - monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply, and availability of credit with a view to achieving the ultimate objective of economic policy mentioned in the Reserve Bank of India Act, 1934.

18.dissonance (noun)

English Meaning - difference, variance, dissimilarity, contradiction, incongruity, discrepancy.

19.betray (verb)

English Meaning - reveal, expose, disclose, lay bare, make known.

20.posture (noun)

English Meaning - stance, standpoint, point of view, position, stand, approach, perspective, opinion.

21.hold (verb)

English Meaning - continue, carry on without changing; remain unchanged.

22.benchmark (noun)

English Meaning - standard, base/basis, point of reference, criterion, ideal.

23.benchmark interest rate (noun)

English Meaning - a minimal/minimum interest rate set and published by commercial banks for accumulating interest on different credit types

24.flag (verb)

English Meaning - indicate, point out, identify; draw attention to something.

25.price shocks (noun)

English Meaning - price shocks are times when the prices for something have drastically increased or decreased over a short span of time.

26.behind the curve (phrase)

English Meaning - below average; lagging behind other competitors.

27.anchor (verb)

English Meaning - secure, fasten, attach, connect firmly.

28.lead to (verb)

English Meaning - cause, bring on, bring about, result in, produce, give rise to.

29.headline inflation (noun)

English Meaning - it is a measure of the total inflation within an economy, including commodities such as food and energy prices.

30.core inflation (noun)

English Meaning - it is a measure of the total inflation within an economy, excluding commodities such as food and energy prices (which change frequently).

31.quicken (verb)

English Meaning - accelerate, step up, increase, surge, rise.

32.recurring (adjective)

English Meaning - happening or occurring frequently; constant, continuing, repeated.

33.disinflation (noun)

English Meaning - decrease in the rate of inflation.

34.opt (verb)

English Meaning - choose, select, decide on, go for.

35.repo rate (noun)

English Meaning - it is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

36.bi-monthly (adjective)

English Meaning - it means “once every two months” and it also means “twice a month”.

37.to be sure (phrase)

English Meaning - certainly, without any doubt.

38.Retail or Consumer Price Index (CPI) inflation (noun)

English Meaning - The change in the price index of the basket of consumer goods and services over a period of time is referred to as CPI-based inflation or retail inflation.

39.Wholesale or Wholesale price Index (WPI) inflation (noun)

English Meaning - The change in the price index of the basket of wholesale goods (and no services) over a period of time is referred to as WPI-based inflation or wholesale inflation.

40.moderate (verb)

English Meaning - reduce, lower, decrease, lessen, weaken.

41.reading (noun)

English Meaning - figure, indication, record, measurement.

42.softening (noun)

English Meaning - decrease, reduction, lessening, moderation.

43.percentage point (noun)

English Meaning - the difference between two percentages is termed as percentage point. (for example: “Interest Rates Jump From 10% to 12%”. In this case, the interest rate increased by “2 percentage points” or you can say that the interest rate is increased by 20%).

44.moderation (noun)

English Meaning - reduction, lessening, decrease, easing.

45.fleeting (adjective)

English Meaning - brief, transient, short-lived, short, momentary, sudden.

46.price gain (noun)

English Meaning - a general increase in the price of something.

47.accelerate (verb)

English Meaning - increase, rise, expedite, step up, speed up.

48.amid (preposition)

English Meaning - in the middle of, surrounded by; during.

49.heightened (adjective)

English Meaning - enhanced, increased, intensified,

50.outlook (noun)

English Meaning - prospects, chances, possibilities, expectations, future.

51.household (noun)

English Meaning - family, house.

52.undertake (verb)

English Meaning - begin, start, commence, embark on.

53.horizons (noun)

English Meaning - limits, barriers, boundaries; range of experience, outlook, perspective, ambit, perception, purview.

54.median (adjective)

English Meaning - average, mean.

55.unequivocally (adverb)

English Meaning - absolutely, explicitly, directly, clearly, categorically, conclusively, unconditionally, unqualifiedly, unambiguously.

56.underline (verb)

English Meaning - emphasise, underscore, highlight, stress, call/draw attention to.

57.the fact that (phrase)

English Meaning - used to refer to a specific situation under consideration/discussion.

58.far from (phrase)

English Meaning - not, not at all; nowhere near, a long way from.

59.durably (adverb)

English Meaning - long-lastingly, strongly, permanently.

60.central bank (noun)

English Meaning - the banking regulator of a county’s banking system. (e.g. The Reserve Bank of India (RBI) is the central bank of India).

61.exemplify (verb)

English Meaning - show, demonstrate, display, illustrate, represent.

62.upgrade (verb)

English Meaning - improve, enhance, revamp, reform, restore, make better

63.fiscal (adjective)

English Meaning - financial, monetary, budgetary.

64.cite (verb)

English Meaning - mention, refer to, point to, adduce, invoke, turn to, resort to.

65.robust (adjective)

English Meaning - strong, powerful.

66.besides (preposition)

English Meaning - apart from, other than, barring, excluding.

67.strengthening (noun)

English Meaning - reinforcement, fortification, consolidation, buttressing, bolstering.

68.buoyancy (noun)

English Meaning - high level of activity, growth, development, progress, improvement, vigour/strength.

69.prospects (noun)

English Meaning - possibilities, potential, expectations, outlook, future.

70.cumulative (adjective)

English Meaning - aggregate; accruing, collective, combined.

71.subsequent (adjective)

English Meaning - successive, consecutive, continuous.

72.retention (noun)

English Meaning - the continued possession & use of something.

73.damp (verb)

English Meaning - dampen, lessen, decrease, diminish, reduce, lower, control.

74.impulse (noun)

English Meaning - stimulus, fillip, impetus; urge, need, drive, desire.

75.barring (preposition)

English Meaning - except, except for, apart from, other than, besides, excluding.

76.traction (noun)

English Meaning - purchase, upsurge; popularity, acceptance.

77.largely (adverb)

English Meaning - mostly, mainly, generally.

78.observe (verb)

English Meaning - say, remark, comment, mention, state, pronounce.

79.discretionary (adjective)

English Meaning - optional, voluntary, subjective, up to the individual, non-mandatory, non-compulsory.

80.in view of (phrase)

English Meaning - because of, as a result of, considering, taking into consideration.

81.Consumer Confidence Survey (CCS) (noun)

English Meaning - The Consumer Confidence Survey (CCS) is one of the most keenly watched surveys conducted by the Reserve Bank of India. The CCS, conducted bimonthly (every two months) in 19 major cities, seeks responses on current perception and future expectations on a host of indicators such as income, employment, inflation and spending.

82.Consumer Confidence Index (CCI) (noun)

English Meaning - The Consumer Confidence Index (CCI) is a survey that indicates how optimistic or pessimistic consumers are regarding their expected financial situation. If the consumers are optimistic, spending will be more, whereas if they are not so confident, then their poor consumption pattern may lead to recession.

83.retain (verb)

English Meaning - maintain, hold on to, keep back.

84.sentiment (noun)

English Meaning - feeling, emotion, point of view.

85.sans (preposition)

English Meaning - without.

86.stability (noun)

English Meaning - steadiness, firmness, solidity, secureness, strength.

87.fritter away (phrasal verb)

English Meaning - to waste, squander, misspend, misuse something (time or money); spend or use up recklessly/unwisely

88.erosion (noun)

English Meaning - decline, decrease, deterioration, disintegration, weakening.