Mumbai: Reserve Bank said on Wednesday that it expects retail inflation to reach 5.2% in the first half of the current fiscal year and revised the target down to 5% for the quarter ended March.
For The Quarter Of 2021, The Central Bank Had Projected Retail Inflation At 5.2%
Future inflation trajectory will critically depend on the temporal and special progress of the 2021 season southwest monsoon, said RBI Governor Shaktikanta Das.
While headline inflation remains within the tolerance band at 5% in Feb 2021, some highlight constituents test the upper tolerance level. Going forward, the food inflation trajectory will critically depend on Southwest Monsoon’s temporary and special progress in the 2021 season, said RBI Governor Shaktikanta Das on Wednesday, and announcing the first monetary policy for the current fiscal year.
Reserve Bank of India (RBI) kept the key repo rate unchanged at 4% to support growth in the current situation.
Das said there was some relief from the incidence of domestic taxes on petroleum products through the Center’s coordinated actions, and states could provide relief on top of the recent international crude price easing.
The combination of international commodity prices and logistics costs, however, may push up input price pressures across manufacturing and services, he added.
“In view of all these factors, the CPI inflation projection was revised to 5% in Q4 of FY2021; 5.2% in Q1 of FY2021-22; 5.2% in Q2 of FY22; 4.4% in Q3 and 5.1% in Q4 with broadly balanced risks,” Das said.
Earlier, the central bank had projected 5.2% retail inflation for the quarter of March 2021.
RBI is mandated to keep inflation at 4%, with a plus or minus 2% bias.