RBI will take necessary steps to keep inflation within expected limits: Finance Minister Nirmala Sitharaman

 

Finance Minister Nirmala Sitharaman on Monday said at a post-Budget industry event in Jaipur that the Reserve Bank of India (RBI) will take necessary steps to manage inflation within "expected limits".

Sitharaman said, "In emerging markets, the situation is unique for each country. I think the RBI is monitoring the Indian economy and taking decisions as and when required."

India's consumer price index (CPI) or retail inflation rose to a three-month high in January, returning to the RBI's upper tolerance band of 6% after a gap of two months, led by a rise in food prices and non- food segment, official data showed earlier this month. Core inflation, which is non-food, non-fuel inflation, stood at 6.2% over 6% in January.

With the exception of November and December 2022, retail inflation has remained above the RBI's upper tolerance level of 6% since January 2022. Retail inflation based on the Consumer Price Index (CPI) stood at 5.72 per cent in December and 6.01 per cent in January 2022. The previous high was 6.77% in October.

The central bank forecasts retail inflation to ease to 6.5% from 6.7% for FY23; 5.3% for the next financial year. The RBI mainly looks at retail inflation for monetary policy formulation.

"The global economic outlook no longer looks as grim as it did a few months ago, growth prospects in major economies have improved, while inflation is easing, although inflation is still well above target in major economies. Core inflation remains Sticky. Non-food credit growth stood at 16.7% as of January 27, 2023 over a year-ago period.