News

Retail inflation jumps to 5-month high of 7.41% in September


NEW DELHI: Retail inflation based on the consumer price index (CPI) rose to a five-month high of 7.41% in September, government data released on Wednesday.
This is the 9th month in a row as inflation figures remain above the Reserve Bank of India (RBI) tolerance band of 2-6%.
In August, CPI recorded a 3-month downtrend and accelerated to 7%, mainly due to rising food prices.
The RBI is mandated by the government to keep inflation in the 2-4% range, with a margin of 2% on each side.
Against this backdrop of mounting inflationary pressures, the central bank is expected to raise the benchmark lending rate further, thereby further increasing the financial burden of the people.
The RBI’s Monetary Policy Committee (MPC) reviews retail inflation figures while formulating monetary policy bimonthly.
What led to the increase in inflation?
Fueled by erratic rainfall and supply shocks from Russia’s invasion of Ukraine, prices of everyday consumer goods such as grains and vegetables, which are the largest of the inflation basket, have risen in the past two years. past year.
Already reeling from the economic shocks caused by the Covid-19 pandemic, consumers will be more affected by the rise in prices as they spend a large portion of their income on food, amid the festive season in… country.
The government also introduced ceratin measures to calm domestic prices, including some export restrictions on rice to curb inflation. But consumer prices have defied and stayed above the RBI’s upper limit this year.
Besides, the continuously weakening rupee is adding to the calamity. The undervalued Indian rupee hit a fresh low of 82.32/USD last week and is expected to continue to come under pressure over the next 6 months.
That is likely to put pressure on the RBI, which has raised its key repo rate by 190 basis points in four moves this year, to ramp up rate hikes.
What RBI said
While presenting his monetary policy on September 30, RBI governor Shaktikanta Das maintained his inflation forecast for fiscal year 23 at 6.7% amid geopolitical concerns due to the war. Russia-Ukraine induced and inflation is expected to be under control from January.
The governor of RBI said India faces upside risks to food prices, noting that grain price pressure is spreading from wheat to rice in anticipation of reduced kharif rice production.
“Less seeding for the kharif pulse could also put some pressure on. The easing of monsoons and intense rains in various regions have already started to impact vegetable prices, especially tomatoes. These risks to food inflation could adversely impact inflation expectations,” the RBI Governor noted.
“If high inflation is allowed to persist, it always causes quadratic effects and does not resolve expectations. Therefore, monetary policy must take corrective actions on the policy rate and liquidity conditions are consistent with the evolving inflationary growth drivers. Monetary policy must always be alert and agile. , “Das said.

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button