RBI MPC member predicts ‘less severe’ high food inflation
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member highlighted that going ahead, as India develops, the problem of high food inflation would be "less severe".
The Reserve Bank of India on Friday projected the retail inflation rate for the current quarter of FY2020-21 at 5.2 per cent, saying it has returned within the “tolerance band”.
On the economy, the RBI said it is only going to look upwards from here.
With an aim to control inflation, the central bank had kept the key repo rate unchanged at 4 per cent with an accommodative stance in the last monetary policy review of this fiscal.
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RBI Governor Shaktikanta Das while unveiling the policy on Friday said the retail inflation has “returned within the tolerance band” of 4 per cent. The central bank has the mandate to keep retail inflation at 4 per cent with a bias of plus/minus 2 per cent on either side.
The inflation (retail) projection is revised to 5.2 per cent for Q4 of the current fiscal, Das said, adding vegetable prices are likely to remain soft in near term on the back of fresh arrivals in the market.
In its previous policy decision in December, the RBI had projected retail inflation to be at 5.8 per cent for Q4 FY’21.
For the first half of the next fiscal year, the Reserve Bank has projected inflation to be in a band of 5.2-5 per cent.
And for the third quarter of 2021-22 (October-December), the RBI projected inflation at 4.3 per cent.
“We are projecting it at 4.3 per cent. We are assessing the risks to be balanced,” Das said.
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