Amid inflation concerns, RBI Governor said – strict control will have to be imposed, otherwise it will be difficult

Mumbai : Today the Reserve Bank of India had organized the Monetary Policy Committee meeting for the current financial year 2024-25, in which the topic of retail inflation was also discussed. RBI has kept its estimate of the country's retail inflation stable. Its rate has been maintained at 4.5 percent like last time.

RBI Governor Shaktikanta Das, after the fourth bi-monthly monetary policy review of the current financial year, on Wednesday stressed that the central bank will have to take strict measures to keep a close watch on the price situation. For which inflation will have to be tightly controlled, otherwise it may see a rise again.

Inflation is expected to be this percentage

The Governor also said that the Flexible Inflation Targeting or FIT framework has completed eight years since its implementation in 2016 and is a major structural reform of the 21st century in India. Under FIT, the central bank has ensured that retail inflation based on Consumer Price Index i.e. CPI remains at 4 percent with a variation of 2 percent.

Also read:- General public got a special gift, this festive season the scope of UPI payment increased

Increase in inflation rate in September

The RBI has maintained its consumer price index-based inflation forecast for 2024-25 at 4.5 percent. The inflation rate is expected to be 4.1 percent in the second quarter, 4.8 percent in the third quarter and 4.2 percent in the fourth quarter. Inflation for the first quarter of financial year 2025-26 is estimated at 4.3 percent. The risks are equally balanced. “Inflation may rise in September due to adverse base effect and rising food prices,” Das said. Apart from other factors, the main reason for this will be the decrease in production of onion, potato and gram dal in 2023-24.”

Crude oil price fluctuations

However, overall inflation is expected to decline sequentially in the fourth quarter of this year on the back of a good Kharif crop, adequate grain stocks and prospects of a good harvest in the upcoming Rabi season, he said. Das said there is a risk of inflation going up in case of adverse weather and increased foreign conflicts. There has been a lot of fluctuation in the price of crude oil at the international level in October.

reduction in inflation

A significant decline has been observed in retail inflation in July and August. The main reason for this is the base effect. Das said that despite the possibility of a rise in the prices of food items in the coming time, the price situation at the local level indicates a decline in overall inflation going forward.

(with agency input)