Will Vegetables, Fruits, Pulses Be More Expensive? Check What RBI Monetary Policy Indicates On Inflation This Year

Reserve Bank Governor Shaktikanta Das pointed out the need to remain vigilant about food prices, due to the forecast of higher temperatures between April-June.

The Reserve Bank of India (RBI) Governor Shaktikanta Das announced the first bi-monthly monetary policy of the financial year 2024-25 today.  The central bank kept the repo rate unchanged at 6.5%.

While giving views on Inflation, RBI governor highlighted that , “Core inflation declined steadily. Ensure to meet the target 4% for inflation and see upside risk on inflation. The MPC must be ‘actively disinflationary.’

RBI Governor Shaktikanta Das On Inflation

The Reserve Bank of India (RBI) projected CPI inflation for FY25 at 4.5%. The RBI governor, Shaktikanta Das, said that two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation. The elephant has now gone out for a walk and appears to be returning to the forest. 

“We would like the elephant to return to the forest and remain there on a durable basis. In other words, it is essential for the best interest of the economy that CPI inflation continues to moderate and aligns with the target on a durable basis,” said the RBI Governor during RBI Monetary policy meet.

According to Shaktikanta Das, CPI inflation is predicted to drop to 3.8% by Q2FY25 before rising once more to around 4.5% by the end of the fiscal year.

RBI On Food Inflation This Year

RBI governor Shaktikanta Das highlighted that inflation has come down significantly but it’s still above the 4% target we want to achieve. 

Considering a normal monsoon this year, CPI (consumer price index-based) inflation for the current year is projected at 4.5 per cent by RBI, with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 percent, and Q4 at 4.5 per cent.

Reserve Bank Governor Shaktikanta Das pointed out the need to remain vigilant about food prices, due to the forecast of higher temperatures between April-June.

He also said that the impact of reduction in fuel prices on inflation will deepen in the coming months.

“The success of the disinflation process so far should not distract us from the vulnerability of the inflation trajectory to the frequent incidence of supply-side shocks. Our effort is to ensure price stability on an enduring basis, paving the way for sustained periods of high growth,” added the RBI governor.

The two-day meeting of the Monetary Policy Committee (MPC) headed by RBI governor Shaktikanta Das started on Wednesday, April 3, and concluded today i.e. on April 5.