RBI Lowers FY23 & Q4 Inflation Projections, Sets FY24 CPI Estimate

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RBI Lowers FY23 & Q4 Inflation Projections, Sets FY24 CPI Estimate
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The Reserve Bank of India has lowered the country’s retail inflation projection by 20 basis points to 6.5% for the current financial year from 6.7% earlier. It expects the Consumer Price Index (CPI) inflation to average 5.3% in the financial year 2023-24.

RBI Governor Shaktikanta Das estimates inflation to remain above the 4% target and stated that the MPC will maintain a strong vigil on inflation so that it remains within the band, and aligns with the target going ahead.

The central bank has cut the CPI inflation forecast for the final quarter of FY23, i.e., Jan-Mar 2023 period to 5.6% from 5.9% earlier.

RBI MPC has hiked the repo rate by 25 basis points to 6.5% on Feb 8, 2023, marking the sixth consecutive rise in the interest rate, while continuing to retain its ‘Withdrawal of Accommodation’ stance in a 4:2 vote.

Read Also: RBI Hikes Repo Rate by 25 Bps, Retains Accommodation Withdrawal Stance

"Stickiness of core inflation is a matter of concern. Inflation is moderating, economic growth continues to be resilient, and system liquidity remains in surplus,” said Das.

Based upon inflation forecasts, the price of India's crude oil basket is estimated at $95/barrel, said RBI Governor.

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