No relief is expected for the next three months from rising inflation due to Ukraine war. There can be some relief only after the April-June quarter of the current financial year. However, retail inflation is expected to rise to 5.7 per cent in 2022-23 from the previous 4.5 per cent.
It could be 6.3 per cent in the first quarter. It is estimated to be 5 per cent in the second quarter, 5.4 per cent in the third quarter and 5.1 per cent in the fourth quarter. Inflation has been above the RBI’s upper limit of 6 per cent for three consecutive quarters.
RBI Governor Shaktikanta Das said after the Monetary Policy Committee (MPC) meeting on Friday that the situation arising out of the Russia-Ukraine war was responsible for the rise in prices. As a result, crude oil, edible oil and commodity prices have risen.
Keeping this in mind, emphasis will be laid on withdrawing the simple policies which were in effect during the Corona period. The time has come for monetary policy priorities to focus on inflation rather than growth.
Shaktikanta Das said that the central bank is not bound by any rule. All means will be used to ‘protect’ the economy. The economy is facing new and bigger challenges. The economy has sufficient foreign exchange reserves. Who will be saved from the challenges.