Projecting the inflation trajectory in line with its earlier estimate, the Reserve Bank of India (RBI) on Wednesday said the retail inflation is expected to be around 5.3 per cent during the current fiscal year.
It is expected to ease further to 5 per cent by the first quarter of the next fiscal year, RBI Governor Shaktikanta Das said while announcing the monetary policy for the last time of this fiscal.
The inflation trajectory is likely to be in line with our earlier projections, and price pressures may persist in the immediate term, Das said.
"CPI (consumer price index) inflation is projected at 5.3 per cent for 2021-22: 5.1 per cent in Q3; 5.7 per cent in Q4 of 2021-22, with risks broadly balanced. CPI inflation is then expected to ease to 5 per cent in Q1:2022-23 and stay at 5 per cent in Q2:2022-23," he said.
Das said RBI's monetary policy stance is primarily attuned to the evolving domestic inflation and growth dynamics.
The reduction of excise duty and value added tax (VAT) on petrol and diesel will bring about a durable reduction in inflation by way of direct effects as well as indirect effects operating through fuel and transportation costs, the governor said.
The Reserve Bank has kept its key repo rate (at which it lends money to banks) unchanged at 4 per cent, with the stance remaining "accommodative" as long as necessary to revive and sustain growth on a durable basis.
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