After an upward swing in May inflation, RBI Deputy Governor S S Mundra today said the central bank will continue to monitor data and slash rates only if there is a decline in the number.
“…All the data points will be taken into account. If any room develops, then there would be room for the accommodative monetary policy to continue,” Mundra told reporters here.
He was replying to a question on CPI data for May.
Rising for the second month in a row, retail inflation, as measured by Consumer Price Index (CPI), shot up to 5.76 per in May due to rise in prices of food items, including vegetables.
CPI for April has been revised upwards to 5.47 per cent from the earlier 5.39 per cent, government data showed today. It was 5.01 per cent in May 2015.
In its guidance in the second bi-monthly policy statement, the RBI had opted for a status quo but said that it remains accommodative in its stance.
“Given the uncertainties, the Reserve Bank will stay on hold, but the stance of monetary policy remains accommodative. The Reserve Bank will monitor macroeconomic and financial developments for any further scope for policy action,” it had said.
Mundra, who launched journalist Tamal Bandyopadhyay’s book ‘Bandhan: The Making of a Bank’ here, said that risks on both sides are also explained in the policy statement.
Commenting on the CPI data, private sector lender IDFC Bank’s Chief Economist Indranil Pan said the jump in May is due to inflation in protein-rich food items and the monsoon will not be of help.