There will be no relief from food inflation yet, RBI warns…
The Finance Ministry has said in its Monthly Economic review that inflation is coming down. But the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india believes that there is no relief from food inflation in the coming days. Household inflation expectations are increasing, in such a situation, the monetary policy will have to be cautious keeping in mind the possible effects from the pressure of food prices.
The bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india, the regulator of the banking sector, has released the minutes of the Monetary Policy Committee meeting held on 6-8 august 2024. According to this, there has been a rise in food items in July. Due to base effects, cpi inflation may come down in the second quarter but inflation may increase in the third quarter. The risk of food inflation remains due to uneven weather. Due to global tensions, there is volatility in crude oil prices. Increase in mobile tariffs can increase core inflation. Domestic inflation expectations are rising and consumer confidence has decreased.
According to RBI minutes, governor Shaktikanta Das said, headline inflation may remain low in July and the second quarter of the financial year, but food inflation does not seem to be decreasing. Domestic inflation expectations are high, so monetary policy has to be very cautious so that food inflation does not affect other components. He expressed hope that food inflation may come down due to good monsoon and increased sowing of Kharif crops, rising reservoir levels and estimates of better output of Rabi season. RBI governor said, inflation is coming down but its pace is slow. The target of 4 percent inflation rate is still far away. In such a situation, inflation has to be monitored and the effect of food inflation has to be avoided.
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