look news india
RBI Bulletin: Retail inflation is gradually coming down but high and volatile food prices are a hindrance to reducing inflation. This was stated in the bulletin released by the Reserve Bank of India on Wednesday. An article published in the Bulletin titled 'State of the Economy' for June 2024 states that global growth was strong in the first quarter of 2024 and many central banks adopted somewhat accommodative monetary policy due to low inflation in their respective countries. High-frequency indicators (GST collection, power consumption, freight traffic, PMI, etc.) show that India's real GDP (gross domestic product) growth rate in the first quarter of FY 2024-25 was similar to the growth achieved in the previous quarter.
Responsibility to keep inflation at 4 percent
Additionally, an article written by a team led by RBI deputy governor Michael Debabrata Patra said agricultural prospects are turning positive due to the early arrival of the southwest monsoon. “The moderation in retail inflation is driven by a sustained decline in core inflation (excluding fuel and food items),” the article said. “However, volatile and high food prices are impeding further inflation,” it said. It is the RBI’s responsibility to keep retail inflation at 4 per cent with a margin of 2 per cent.
Repo rate remains steady at 6.50%
Earlier this month, the RBI's Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 6.50 per cent. The MPC reiterated its stance of focusing on withdrawing the accommodative stance to keep inflation within the target while supporting economic growth. The central bank has projected inflation to decline from 5.4 per cent in 2023-24 to 4.5 per cent in 2024-25. The RBI said that the views expressed in the article are those of the authors and do not represent the views of the central bank.