The interest rate cut by Reserve Bank of India (RBI) is unlikely in February due to the persistent inflation, SBI Research stated in its latest report, adding that a slight easing in inflation is expected starting in January.
Household consumption in India is set to experience accelerated growth in the second quarter of FY 2024-25, the Reserve Bank of India said in its September Bulletin released on Friday.
The ongoing volatility in the prices of key food items such as tomatoes, onions, and potatoes (collectively known as TOP) and pulses continues to pose significant challenges for the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), highlights a report by SBI.
"The elephant (Inflation) is walking very slowly, and we are watchful about this. It is around 4.9 per cent, 4.8 per cent and earlier it was 5 per cent. Our target is 4 per cent for inflation and we hope it goes the soon and most importantly it should stay there," said Das.
Sinha and Jasrai stated, "March 2024 retail inflation at 4.85 per cent was 10 months low and was on expected lines. Retail inflation now for 54 consecutive months and 18 quarters is higher than the RBI inflation target of 4.0 per cent. While the headline inflation is trending downwards, the
"Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4 per cent," RBI Governor said announcing the decisions of the first MPC of FY25.
Once the CPI comes under control for fruits, vegetables, spices, and cereals, headline inflation is expected to drastically reduce to come near the mid-point of the RBI inflation target of 4 per cent, said SBI Research in a report.
"Our job is only half done, having brought inflation within the target band (4-6 per cent). Our fight against inflation is not yet over," said the governor at the latest monetary policy meeting held during June 6-8, whose Minutes were published on Thursday.
Retail inflation in India fell marginally but remained above RBI's 6 per cent upper tolerance band for the second straight month in February, with the Consumer Price Index pegged at 6.44 per cent, government data showed.
India's retail inflation was above RBI's six per cent target for three consecutive quarters and had managed to fall back to the RBI's comfort zone only in November 2022.
India's retail inflation was above RBI's six per cent target for three consecutive quarters and had managed to fall back to the RBI's comfort zone only in November 2022.