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RBI Retains FY23 Inflation Forecast, Revises CPI Figures For Q3, Q4

Published 07-12-2022, 11:19 am
Updated 07-12-2022, 11:20 am
© Reuters.

By Malvika Gurung

Investing.com -- The Reserve Bank of India has retained the country’s inflation projection for the current financial year at 6.7%, while raising the benchmark interest rate by 35 bps to 6.25% on Dec 7, snapping a three-consecutive 50 bps rate hike streak.

The central bank has raised its CPI inflation forecast for the third quarter of FY23 or for the Oct-Dec 2022 period from 6.5% to 6.6%.

Similarly, for Jan-Mar 2023 (Q4 FY23), RBI has raised the inflation forecast to 5.9% from 5.8%. The central bank expects inflation to fall to 5% by the first quarter of the next financial year (FY24), followed by a projection of 5.4% in July-Sept 2023.

India’s retail inflation declined sharply to 6.77% in Oct to a 3-month low, mainly due to easing food prices, yet remaining above RBI’s mandated tolerance band of 2-6% for the 10th consecutive month.

According to RBI Governor Shaktikanta Das, inflation continues to remain high and broad-based world over despite easing commodity, energy, and food prices. He stated that the problem of inflation is not over, and the battle against inflation continues.

“On balance, the MPC was of the view that further calibrated action was warranted to keep inflation expectation anchored, break core inflation persistence, and contain second-round effects,” said Das.

Read Also: RBI MPC: Revised Repo, SDF, MSF Rates; Das on Inflation & Indian Economy

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