RBI projects India’s FY23 retail inflation at 4.5%
Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that India’s FY23 retail inflation is projected at 4.5 percent. The RBI also retained its key short-term lending rates during the sixth and final monetary policy review of FY22.
Inflation projection for 2021-22 is retained at 5.3 percent, with Q4FY22 at 5.7 percent on account of unfavorable base effects that are expected to ease subsequently.
Earlier in December 2021, the RBI had said that the retail inflation is likely to ease to around 5 percent next fiscal on the back of government measures to ease supplies, reduction in fuel prices, and prospects of good crops.
In the policy statement post the Monetary Policy Committee’s bi-monthly meeting, Das said: “The CPI reading for January 2022 is expected to move closer to the upper tolerance band, largely due to adverse base effects. Taking all these factors into consideration and on the assumption of a normal monsoon, CPI inflation for 2022-23 is projected at 4.5 percent with Q1:2022-23 at 4.9 percent; Q2 at 5.0 percent; Q3 at 4.0 percent; and Q4 at 4.2 percent, with risks, broadly balanced.”
Further, the growth-oriented accommodative stance was retained to give a push to economic activity. In addition, the RBI’s Monetary Policy Committee (MPC) maintained the repo rate, or short-term lending rate, for commercial banks, at 4 percent.
Earlier, The Reserve Bank has kept the repo rate, the rate at which it lends money to the banks — unchanged at 4 percent for the 9th time in a row, committed to continue supporting economic growth amid uncertainty over the impact of the Omicron strain of the Coronavirus on the economy.
[With Inputs from IANS]
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