New Delhi: The country’s retail inflation moved towards the upper limit of the Reserve Bank of India’s (RBI) target range in November as fruit and vegetable prices climbed, according to a Reuters poll.
On Wednesday, the RBI stoked interest rates as predicted by another Reuters poll, but the central bank said price pressure could persist in the near term.
A December 6-8 poll of 39 economists has projected consumer price inflation at 5.10 per cent in November, up from 4.48 per cent in October. If it does, it will be within the RBI’s target band of 2 per cent-6 per cent for the fifth consecutive month. The forecast ranged from 4.50 per cent to 5.32 per cent. The CPI figures are due to be released on December 13.
“Last month, a reduction in fuel taxes and a slightly favorable statistical base was offset by a sharper move in the price of perishables,” said Yuvika Singhal, economist at QuantEco Research.
“It was further pushed due to untimely rains and rise in LPG and kerosene prices,” he said.
Brent crude oil, India’s biggest import, was down more than 16 per cent last month. On Wednesday it was trading around $75 per barrel.
Higher inflation last year has kept price hikes lower this year than a year ago. But this is expected to subside as mobile phone bills and prices for clothing are set to rise, triggering inflation again.
Chief Economist Madhavi Arora said, “The impacts coming from hike in telecom tariffs, price volatility of perishable goods and any kind of supply-chain disruption from the latest version of COVID are fuel and global commodity prices in recent times. Relief can be denied.” at Emkay Global Financial Services. But the RBI did not make any material changes to its inflation and growth projections. It still expects CPI at 5.1 per cent for Q3 and 5.7 per cent for Q4 of this fiscal.
A separate survey conducted by Reuters found that the reverse repo rate, the rate at which the RBI borrows from banks, was expected to climb to 4.10 per cent by the end of next year, with the first hike of 25 basis points in Q1 2022 Was. Its repo rate was expected to increase by 25 bps in the second quarter.
The survey also showed that industrial output grew by 4.0 per cent in October, from 3.1 per cent in September a year ago.
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