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Wednesday, May 29, 2024

Uncertainties in Food Prices remain; focus on bringing inflation down to 4%: RBI


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New Delhi: Even as the inflation has eased to 5.1 per cent during January and February 2024 from 5.7 per cent in December 2023, the Reserve Bank of India (RBI) Friday said it will remain focussed on inflation and ensure its “descent” to the target of 4 per cent.

“As the uncertainties in food prices continue to pose challenges, the MPC remains vigilant to the upside risks to inflation that might derail the path of disinflation,” RBI Governor Shaktikanta Das cautioned while announcing the RBI’s Monetary Policy.

“Since the last policy, the growth-inflation dynamics have played out favourably. Growth has continued to sustain its momentum surpassing all projections. Headline inflation has eased to 5.1 per cent during January and February 2024 from 5.7 per cent in December 2023, with core inflation declining steadily over the past nine months to its lowest level in the series,” he said.

Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4.0 per cent.

Under these circumstances, the monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past actions. The MPC, therefore, decided to keep the policy rate unchanged at 6.50 per cent in this meeting and remain focused on withdrawal of accommodation, he added.

The MPC will remain resolute in its commitment to aligning inflation to the target.

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