Elevated inflation warrants policy response: RBI article
Says global growth prospects have turned gloomier over the month
image for illustrative purpose
Mumbai: Inflation is persistently at elevated levels that warrants appropriate policy responses to anchor expectations, going forward, said an RBI article published on Thursday.
Retail inflation based on the consumer price index (CPI) softened to 6.71 per cent in July, mainly on account of moderation in food prices.
The Reserve Bank has increased the benchmark lending rate (repo) in three quick successions by 140 basis points to tame inflation, which remains above its tolerance level for the sixth month in a row.
"Perhaps the most heartening development in recent times has been the easing of inflation in July 2022 by 30 basis points from June 2022 and an appreciable 60 basis points from the average of 7.3 per cent for Q1:2022-23. This has validated our hypothesis that inflation peaked in April 2022," said the article on the 'state of the economy'. For the rest of the year, the RBI's projections scent a steady easing of the momentum of price changes, it said. The article has been authored by a team led by Reserve Bank Deputy Governor Michael Debabrata Patra.
Perhaps the most heartening development in recent times has been the easing of inflation in July 2022 by 30 basis points from June 2022 and an appreciable 60 basis points from the average of 7.3 per cent for Q1:2022-23
- RBI article on 'state of the economy'
