RBI Holds Steady on Inflation Targets Amid Economic Fluctuations
The Reserve Bank has maintained the retail inflation projection at 4.5% for 2024-25. Governor Shaktikanta Das highlighted global economic risks and domestic factors like food price momentum affecting inflation. The central bank predicts inflation will ease due to a good harvest and ample buffer stocks.
- Country:
- India
The Reserve Bank of India (RBI) has held firm on its retail inflation projection of 4.5% for the fiscal year 2024-25. Governor Shaktikanta Das emphasized the need for vigilance over price fluctuations and warned against prematurely 'releasing the inflation horse,' which could result in economic instability.
During the recent October monetary policy announcement, Das mentioned the pivotal role of the flexible inflation targeting framework, marking eight years since its implementation. Despite uncertainties like erratic weather and geopolitical tensions affecting global oil prices, India's strong agricultural outputs are expected to stabilize inflation rates.
Food inflation is anticipated to ease, with favorable conditions for rabi sowing, while base effects contributed to softening retail inflation. The RBI remains cautiously optimistic about achieving stable inflation, stressing the need for continuous monitoring of economic indicators.
(With inputs from agencies.)
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