RBI Governor Shaktikanta Das speaks on the RBI’s monetary policy in Mumbai, Friday, April 8, 2022.
Highlight
- Reserve Bank of India on April 8 raised the retail inflation target for the current fiscal to 5.7%
- This was done on the back of rising global prices amid ongoing geopolitical tensions.
- In its last policy review in February, RBI had projected retail inflation to be 4.5% in 2022-23
The Reserve Bank of India on Friday (April 8) raised the retail inflation target for the current fiscal to 5.7 per cent on the back of rising global prices amid the ongoing geopolitical tensions, even as it kept the demand for cereals and pulses. Prices were expected. To soften on the prospects of a good winter crop.
“Global food prices have tightened significantly along with metal prices. The economy is battling a sharp rise in inflation. Inflation in 2022-23 is now at 5.7 per cent with Q1 at 6.3 per cent, Q2 at 5 per cent, Q3 at 5.4 per cent. Estimated percentage and Q4 at 5.1 per cent,” RBI Governor Shaktikanta Das said while unveiling the first monetary policy review for the current fiscal.
In its last policy review in February, the RBI had projected retail inflation at 4.5 per cent in 2022-23.
The apex bank kept the benchmark interest rate – the repo at which it lends short-term money to banks – unchanged at 4 per cent.
The Monetary Policy Committee (MPC) also unanimously decided to remain accommodative, while focusing on a return to housing to ensure that inflation remains within the target while supporting growth going forward.
This is the 11th time in a row that the Monetary Policy Committee (MPC) headed by Das has maintained the status quo.
Read also: RBI keeps repo rate unchanged at 4% for 11th consecutive time; FY23 GDP cut by 7.2%
“However, it may be noted that given the economic volatility on global crude oil prices, the evolving geopolitical tensions, any projections of growth and inflation are risky,” Das said.
However, the RBI expressed hope that a good harvest from the rabi (winter) crop will keep prices of cereals and pulses under control.
The Reserve Bank has been mandated to keep retail inflation at 4 per cent, with a bias of 2 per cent on either side.