The rising graph of inflation has troubled the common people, how will the RBI find a solution?
new Delhi. According to Moody’s Analytics, the inflation graph in India is going up, which is certainly uncomfortable as it will limit the Reserve Bank of India’s (RBI) ability to offer rate cuts. Moody’s Analytics has said that retail inflation has remained above the Reserve Bank’s target of 4 per cent for the last eight months.
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What the figures say
According to Moody’s, India’s main CPI (Consumer Price Index), excluding food, fuel and light, rose to 5.6 per cent in February from 5.3 per cent in January. Talking about overall, India’s CPI increased by 5 per cent in February on an annual basis, from 4.1 per cent in January. Food and beverage growth reached 4.3 percent in January as against 2.7 percent. 0 According to Moody’s, “Food is the major factor influencing inflation, representing 46 percent of the total CPI.
Fluctuations seen in food prices
In the year 2020, the CPI went above 6 percent due to frequent fluctuations in food prices and rising oil prices. As a result, RBI’s ability to maintain accommodative monetary settings during the epidemic was disrupted. “According to Moody’s Analytics note, higher fuel prices will pressurize the CPI to keep it upward and RBI’s ability to push forward rates. Will be limited in making cuts. RBI has a retail inflation target of 4 percent with a margin of 2 percent. It is expected that RBI will maintain its current inflation target beyond the current expiry date of March 31.
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