The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, has announced a slight reduction in the central bank’s inflation projection for the current financial year to 5.1 per cent. This adjustment comes after India’s Consumer Price Index (CPI) inflation dropped from 6.4 per cent in February to 4.7 per cent in April 2023, influenced by favorable base effects and a softening trend across all three major groups.
Inflation Projection Details
The RBI has projected the CPI inflation for the fiscal year 2023-24 as follows:
- Q1: 4.6 per cent
- Q2: 5.2 per cent
- Q3: 5.4 per cent
- Q4: 5.2 per cent
The risks associated with inflation are considered to be evenly balanced.
Maintaining Vigilance on Inflation Outlook
Governor Shaktikanta Das emphasized the importanceof close and continued vigilance on the evolving inflation outlook. Given the uncertainty surrounding the monsoon outlook and the impact of El Nino, it is crucial to monitor inflation carefully. While consumer price inflation has eased in March-April 2023 and entered the tolerance band of 2-6 per cent, it still remains above the target based on the latest data. The RBI aims to achieve a target of 4.0 per cent going forward.
Monetary Policy Committee’s Actions
Governor Das stated that the Monetary Policy Committee is committed to taking prompt and appropriate monetary actions as required to anchor inflation expectations firmly and bring down inflation to the target level.
This update reflects the RBI’s ongoing efforts to manage inflation and maintain price stability in the Indian economy.
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