RBI MPC Meet: Inflation Projection Revised To 6.7% From Previous 5.7% for FY2023

As the Reserve Bank Of India's Monetary Policy Committee opted to raise Policy Repo Rate today by 50bps to 4.9%, India's inflation projection has also been revised to 6.7% from the previous estimates of 5.7% as commodity prices have come under pressure as a result of the war between Russia and Ukraine.

According to RBI's Governor Shaktikanta Das, "In my statement of May 4, 2022, I had mentioned that as we navigate through this difficult period, it is necessary to be sensitive to the new realities and incorporate them into our thinking. The war in Europe is lingering and we are facing newer challenges each passing day which is accentuating the existing supply chain disruptions. As a result, food, energy and commodity prices remain elevated. Countries across the world are facing inflation at decadal highs and persistent demand-supply imbalances. The war has led to globalisation of inflation. Not surprisingly, central banks are reorienting and recalibrating their monetary policies."

In his earlier interview the RBI Governor said that RBI would take decision on further rate action as per the revised inflation projections for the ongoing fiscal.

Earlier, India's retail inflation, measured by the Consumer Price Index (CPI) surged to 7.79 percent in the month of April due to rising fuel and food prices, according to the data released by the statistics ministry.

The rise in the retail inflation was anticipated amid the hike in the energy prices all across the globe ever since Russia-Ukraine war broke out also contributed to the rise in inflation.