Friday, March 24, 2023

Retail inflation in February remained above RBI’s comfortable level – Usky News

New Delhi: Retail inflation eases marginally in February, but remains above inflation levels reserve Bank of IndiaComfort levels on the back of stable food prices, triggering concerns about another interest rate hike by the next time the central bank reviews monetary policy.
Data released by the National Statistics Office (NSO) on Monday showed retail inflation as measured by the Consumer Price Index (CPI) rose an annual 6.4% in February, a slight slowdown from 6.5% in January but persisted. Above the central bank’s upper tolerance band for the second month in a row. The food price index was close to 6%, similar to January’s level. Rural inflation stood at 6.7% while urban was at 6.1%.
Cereals inflation remained in double digits at 16.7%, while milk and milk products stood at 9.7%. Spice inflation also stood at 20.2% in double digits. Core inflation, which excludes food and fuel, stood at 6%, which experts described as “worrying”.
Vegetable prices remained in the deflation zone, down 11.6%.
“The forecast of record wheat and pulses production as per the Second Advance Estimates of Foodgrains Production is reassuring.
However, there is a possibility of heatwave in March ahead rabi The harvesting adds to concerns around food inflation.
Besides, risks remain elevated on the food inflation front due to looming El Nino effect on kharif crops Rajni SinhaChief Economist at CareAge.
Despite showing signs of easing, inflationary pressures remain and economists say the RBI may hike interest rates yet again. “This print confirms our view that RBI may again hike rates by 25 bps in its April policy,” HDFC Bank said in a note.


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