The Reserve Bank of India on Thursday said that it expects elevated inflation levels during the second quarter, but may ease in the second half of the current fiscal year.
The six-member Monetary Policy Committee (MPC) headed by the RBI Governor Shaktikanta Das further said that the supply chain disruptions continue, resulting in inflation pressures across segments.
Das made the comments while he was announcing the decisions taken by the central bank’s MPC.
“Global economic activity has remained fragile,” said RBI Governor adding that the “surge in COVID-19 cases has subdued early signs of revival.”
Pinning hope on the agriculture sector, he said, Kharif crop harvest is expected to boost rural demand.
“Economic activity had started to recover, but a surge in coronavirus infections has forced imposition of lockdowns,” he added.