NE BUSINESS BUREAU
MUMBAI, DEC 4
The Reserve Bank of India on Friday said retail inflation is likely to remain elevated and pegged it at 6.8 percent for the third quarter of the current fiscal.
RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) is of the view that inflation is likely to remain elevated, barring transient relief in the winter months from prices of perishables.
However, retail inflation is projected to be 5.8 percent in the fourth quarter of 2020-21.
CPI inflation rose sharply to 7.3 percent in September and further to 7.6 percent in October, RBI Governor Shaktikanta Das said while unveiling its bi-monthly monetary policy review.
According to him, with some evidence that price pressures are spreading, the inflation outlook has turned adverse about expectation in the last two months.
“While cereal prices may continue to soften with the bumper Kharif harvest arrivals and vegetable prices may ease with the winter crop, other food prices are likely to persist at elevated levels. Cost-push pressures continue to impinge on core inflation which could remain sticky.
“Taking into consideration all these factors, the CPI inflation is projected at 6.8 percent for Q3 FY2020-21; 5.8 percent for Q4 FY2020-21 and 5.2-4.6 percent in H1 of FY2021-22 with risks broadly balanced,” Das said.
The MPC has kept the key policy or the repo rate unchanged at 4 percent with an accommodative stance to support growth and rein in inflationary pressures.
“Our paramount objective is to support growth while ensuring that financial stability is maintained and preserved at all times,” Das said.
