RBI MPC Meeting: FY24 inflation forecast remains unchanged at 5.4%
In the last monetary policy of 2023, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) projects CPI inflation at 5.4 percent in 2023-24 (FY24), unchanged from earlier.
In the last monetary policy of 2023, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) projects CPI inflation at 5.4 percent in 2023-24 (FY24), unchanged from earlier.
For Q3FY24 (September-December), the projection has been slightly lowered to 5.4 percent from 5.6 percent. The forecast for Q4FY24 (January - March) remains unchanged at 5.2 percent.
Looking ahead to the first (April-June) quarter of the fiscal year 2024–25, the RBI maintains its inflation forecast at 5.2 percent. CPI inflation forecast for July-September 2024 is pegged at 4.0 percent and that for October-December 2024 has been forecasted at 4.7 percent.
Meanwhile, in line with market expectations, the RBI MPC maintained its benchmark interest rate (repo rate) at 6.5 percent during its fifth bi-monthly policy announcement for the financial year 2023–24 and the last policy for 2023, following a 3-day meeting. Standing Deposit Facility and Marginal Standing Facility rates are also left unchanged at 6.25 percent and 6.75 percent, respectively.
The MPC also decided by a majority of five out of six members to remain focused on the ‘Withdrawal of Accommodation’ to ensure that inflation progressively aligns with the target while supporting growth.
Monetary policy must remain actively disinflationary, said RBI Governor Shaktikanta Das. He added that notwithstanding the progress made on lowering inflation, the 4 percent target is yet to be reached and we have to stay the course.
“There has been broad-based easing in core inflation, which is indicative of successful disinflation through monetary policy actions, said Das. He added that the near-term outlook however is masked by risks to food inflation, which might lead to an inflation uptick in November and possibly in December. This needs to be watched for second-round effects, if any,” said the Governor.
Read here: Repo rate unchanged; growth forecast raised; key highlights of December policy meeting
The recent sharp drop in crude oil prices after a prolonged surge came as a relief, especially for a country like India, which depends on imports for more than 85% of its oil requirements.
India's consumer price index (CPI)-based inflation eased to a four-month low in October at 4.87 percent from 5.02 percent in September, edging closer to the central bank's target of 4 percent. The central bank, in its October MPC minutes-of-the-meeting, highlighted that India's headline inflation is ruling above the tolerance band and its alignment with the target is getting interrupted.
The RBI has been mandated by the government to ensure the consumer price index (CPI)-based inflation remains at 4 per cent, with a margin of 2 percent on either side.
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Business NewsEconomyRBI MPC Meeting: FY24 inflation forecast remains unchanged at 5.4%
First Published:8 Dec 2023, 10:50 AM IST
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