Why Shaktikanta Das said that “the elephant has gone for a walk” in relation to RBI monetary policy

“The elephant has now gone for a walk,” RBI Governor Shaktikanta Das said at the meeting to discuss monetary policy. What is this elephant that Shaktikanta Das said, and what did he intend by it? During the first meeting of the Monetary Policy Committee (MPC) for the next fiscal year 2024–25, the Reserve Bank of India (RBI) decided to maintain the benchmark repo rate at 6.5%.

This was carried out with consideration for both the need to further reduce inflation and the strong GDP growth figures.
Inflation was the biggest concern two years ago, according to Shaktikanta Das. The elephant in the room was inflation two years earlier at this same time, when CPI inflation had peaked at 7.8% in April 2022. Now that it’s gone for a stroll, the elephant seems to be making his way back into the bush, the man said.

“We want the elephant to go back into the jungle and stay there for good. To put it another way, it is imperative that CPI inflation be low and consistently in line with the objective in the interest of the economy. Our work is not done until this is accomplished, according to Shaktikanta Das.
The governor of the Reserve Bank of India emphasised the need to remain focused on combating inflation. “We shouldn’t let the disinflation process’s current progress divert our attention from the inflation trajectory’s susceptibility to regular supply-side shocks. Our goal is to permanently maintain pricing stability so that a prolonged era of rapid development may be established,” he said.

Das reports that the Monetary Policy Committee convened on April 3, 4, and 5 of 2024. Following a thorough analysis of the macroeconomic and financial trends that have evolved as well as the prognosis, a 5 to 1 majority agreed to maintain the policy repo rate at 6.50 percent.
“Going forward, strong growth prospects allow policymakers to maintain their focus on inflation and guarantee that it falls to the target of 4.0 percent.” The MPC is attentive to the upside risks to inflation that might scuttle the path of disinflation as long as food price concerns continue to present difficulties, he said.