RBI deputy governor sees FY22 inflation at 5.7% or lower
Published On: Thursday, September 16, 2021 | By: Team KnowMyStock
The retail inflation fell to 5.3% in August and stayed within the Reserve Bank of India’s target range for two successive months. This could lead the RBI to revise the inflation projection for the current financial year. In the August review of monetary policy, RBI revised its inflation projection for the current financial year upward to 5.7% from 5.1% projected in the June policy review.
“Taking into account the outlook on growth and inflation and keeping in mind the inherent output costs of disinflation, it is pragmatic to envisage a glide path along which the MPC can steer the path of inflation into the future,” said RBI’s deputy governor Michael Patra, at the Financial Markets Summit organised by the Confederation of Indian Industry today (16th Sept.).
“The envisaged glide path should take inflation down to 5.7 percent or lower in 2021-22, to below 5 percent in 2022-23 and closer to the target of 4 percent by 2023-24,” Patra said.
The monetary policy committee of the RBI has the mandate to target inflation at 4%, with a variable of 2% on both sides. In his speech at the CII event, Patra said in the MPC’s assessment, inflationary pressures are largely driven by supply shocks which are typically transitory in nature.
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