RBI Governor Shaktikanta Das said that the MPC will remain watchful of inflation
The Reserve Bank of India (RBI) Governor Shaktikanta Das said today that inflation is likely to ease in September next year, adding that the central bank expects retail inflation to be 5.4 percent for the 2023-24 financial year.
However, Governor Das warned that the overall inflation outlook is clouded by uncertainties from the fall in Kharif sowing for certain key crops like pulses and oil seeds, lower reservoir levels, and volatility in global food and energy prices.
"Retail inflation to moderate to 5.2 per cent in next year from the current level of 6.8 per cent," Governor Das said. "Indications are that food inflation may not see sustained easing in Q3. A significant easing of inflation pressures from its exceptionally high level in July and August is expected to materialise in September as the impact of fleeting food price shocks wanes."
"Our inflation target is 4 per cent, not 2 to 6 per cent. We remain vigilant to evolving inflation target," he added.
Governor Das said that the domestic economy is exhibiting resilience on the back of strong demand, and that private sector capex is gaining ground as suggested by the production of capital goods. However, he also said that the transmission of the 250 basis point repo rate cut is still incomplete.
The RBI Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 percent. Governor Das said that the MPC will remain watchful of inflation and remains resolute in its commitment to align inflation to the targeted level.