Any change in policy rates is not expected till September 2018, and the retail inflation would remain in the range of 4.5 percent during this period.
Any change in policy rates is not expected till September 2018, and the retail inflation would remain in the range of 4.5 percent during this period, ratings agency CARE said. However, as inflations soars and touched the 5 percent mark in the second half of the year, Reserve Bank of India (RBI) maybe provoked for a rate change. In the month of March, Consumer Price Index (CPI) inflation touched a 5-month low number and is expected to moderate further in the approaching months. However, the concerns still remain there which may affect the further cooling down of inflation going ahead.
A report by CARE Ratings said, “Food inflation is likely to moderate further in the next 2-3 months but may be affected by the unseasonal rains witnessed recently.” On Thursday, CPI inflation data for March was released and it showed that retail inflation has slowed down to 4.28 percent from 4.48 percent in the previous month.
The CARE report also said that as monsoons are expected to be normal, further cooling down in food prices is expected. The main risks going forward are firming of global crude oil prices, probable rise in minimum supporting price (MSP) of kharif crops, hike in HRA by state governments and unfavorable conditions may pose risks on the price level front, the report said.
The retail inflation came down backed by moderation in vegetable and food prices. The food inflation declined from 3.26 percent in March to 2.81 percent in February. The food and beverage inflation number came down from 3.38 percent. Inflation for beverage was down from 17.57 percent to 11.7 percent. The inflation is still more than of 4 percent mandated by RBI.