Inflation war far from over: RBI

The RBI had in November written to the government explaining the reasons for its failure to bring down inflation below the upper tolerance band of 6 percent for three quarters in a row.

The retail inflation based on the consumer price index (CPI) eased to a three-month low of 6.77 percent in October from 7.41 percent in September, aiding the central bank to go for a smaller rate hike of 35 bps. Inflation has ruled at or above the upper tolerance band of 6 percent since January 2022 and core inflation continues to persist around 6 percent. Headline inflation is expected to remain above or close to the upper threshold in the third and fourth quarters of 2022-23, the MPC said in a statement.

“GDP growth in India remains resilient and inflation is expected to moderate; but the battle against inflation is not over. Pressure points from high and sticky core inflation and exposure of food inflation to international factors and weather-related events do remain,” Das in the monetary policy statement.