look news india
Mumbai: Indian Meteorological Department's warning of high temperature and heat wave in most parts of the country in the three months from April to June has increased the concern of the general public of the country as well as the Reserve Bank of India (RBI). Since Kharif sowing in the country starts from June, the impact of heat on Kharif grains cannot be ruled out.
The Meteorological Department estimates that the temperature in the country will be warmer than normal during April to June.
The heat may impact the Reserve Bank's measures to reduce inflation and vegetable prices may remain high for a long time. An analyst said it was expected that the Reserve Bank would start cutting interest rates from June but now it is likely to last longer.
Now we may see a cut in the repo rate in the meeting of August or October. However, it will also depend on the performance of kharif sowing and monsoon conditions.
The first meeting of the Reserve Bank of India's Monetary Policy Committee for the current financial year begins tomorrow and the committee will announce its decision on April 5.
The retail inflation rate in the country has remained more than the Reserve Bank's target of four percent continuously for the last several months. Due to high inflation, the Reserve Bank has kept the repo rate unchanged at 6.50 percent in the last six meetings. The RBI wants to bring inflation down to close to four percent before it starts cutting interest rates. Any damage to vegetable and cereal crops could impact rural demand.
Prices of food items like coffee, palm oil, sugar have increased significantly recently. In the last financial year, sugar prices have increased by ten percent year-on-year.