RBI: Policy repo rate currently stands at 6.25%. (File)
Mumbai:
The Reserve Bank of India (RBI) said in today’s monthly bulletin that India’s headline inflation has widened and become “stubborn”.
“Inflation may ease slightly, but it is certainly inevitable,” the central bank said in a report.
Headline inflation is expected to pick up in the second quarter of the fiscal year starting next April after falling in the first three months of the year, the bank said.
India’s annual inflation rate fell to 5.88% in November, the first time below the upper threshold of the RBI’s 6% safety band this year.
According to the central bank’s estimates, annual inflation will slow to 5.9% in January to March next year and 5% from April to June 2023 but will rise to 5.4% in three months. next.
India’s central bank has a mandate to keep inflation at 4% over the medium term, within a comfortable 2% range on both sides.
To keep inflation closer to target, the RBI has raised the prime rate by 225 basis points since May 2022. The policy repo rate is currently at 6.25%.
The RBI said that the near-term growth outlook of the Indian economy is supported by domestic dynamics as reflected in high frequency economic indicators.
“Falling input cost pressures, still-rising corporate sales and rising fixed asset investments are heralding the start of the capital gains cycle in India,” it said. said more.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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