Mumbai: Reserve Bank of India (RBI) deputy governor Rakesh Mohan said the early assessment of the monsoon is “encouraging,” indicating policymakers expect adequate rain to boost farm output and help curb the pace of gains in food prices.
“The expectation of the monsoon is encouraging,” Mohan said in Chennai on Thursday. “So far, the situation seems to be as predicted by the meteorological department. Now rainfall is slightly above the long-period average although, in some parts, there’s some problem.”
India’s June-September monsoon rainfall last year was 5% more than average, boosting sowing of most crops.
Rains this year will be 100% of the 1941-90 long-period average, a level deemed normal, the weather office said on 30 June. Rainfall in July, which accounts for a third of the rainy season, will be 98% of the average 293mm, it said.
A government report may show on Friday that wholesale price gains accelerated to 11.75%, the fastest since 1995, in the week ended 28 June from 11.63% in the previous week, according to the median estimate of 17 economists surveyed by Bloomberg.
RBI increased its key overnight lending rate twice last month to curb price gains. It had raised the benchmark repurchase rate last on 24 June by 0.5 percentage point, to 8.5%.