RBI revises its CPI estimate

The Reserve Bank of India has modified its estimate for CPI inflation figures for the month of December 2019 upwards from the 3.5-3.7% to 4.7-5.1% range that it had predicted in the previous policy. This has been done keeping in view the rising food prices. However, the central bank expects inflation to moderate below target by second quarter of next fiscal.

“The Monetary Policy Committee (MPC) recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture. Accordingly, the MPC decided to keep the policy repo rate unchanged and continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target,” the RBI stated.