RBI Governor Shaktikanta Das leaves repo rate at 4% at MPC meeting
The Reserve Bank of India (RBI) said it will continue to focus on the laser to bring retail inflation back to a non-stop 4% for some time, according to the October Monetary Policy Protocol (MPC). .. Released today.
The government requires the central bank to keep the consumer price index (CPI) inflation at 4%, with a range of 2% on both sides. Retail inflation, which was above 6% from May to June, started to decline and only reached 4.35% in September 2021.
“Going forward, food inflation will reduce significantly without light rain, supported by Harif’s record production, ample food reserves, supply-side measures and the main favorable effect. That might happen,” said the RBI governor.
“The volatile crude oil prices, especially the post-mid-September recovery, pushed pump prices to new heights and increased the risk of high transportation costs being passed on to retail prices of goods and services,” he said. Added.
At its August 2021 meeting, the RBI panel faces the challenge of core inflation which has been above the ceiling for the second month in a row. The unexpected slowdown in inflation in July and August this year was mainly supported by the dynamics of food prices which fell sharply in August.
“The inflation curve is uneven, slow and likely to be breached,” said RBI Vice President Michael Patras.
“Fortunately, the inflation forecast has been exceeded by the actual result of lower food inflation.
The inflation formation has been affected by repeated shocks that have pushed fuel inflation to record levels, keeping core inflation in check and at risk of rising,” Patras added.