But food prices can pose policy challenges
"The focus, therefore, naturally shifts to the next stage of bringing the inflation to the target level," said Varma, adding that there is no ambiguity in the eventual inflation goal of 4%
Sustained higher inflation can affect outlook
MPC needs to be extremely vigilant
Das said that it will 'actively' manage the liquidity in the economy. The central bank will undertake open market operations to do so
Inflation should remain largely range bound in the coming months (5-6 per cent)
Market participants believe that the transmission did not occur because surplus liquidity in the banking system remained high due to several reasons, including the withdrawal of the Rs 2,000 banknote
RBI MPC has decided to continue with the pause on repo rate at 6.5 per cent for the fourth time in a row
RBI policy: Shaktikanta Das said that real GDP forecast for 2023-24 has been retained at 6.5% by MPC
The Reserve Bank of India, in its policy meeting in August, mandated that banks maintain an incremental cash reserve ratio of 10 per cent on some deposits
All 38 economists in a Bloomberg survey expect the Reserve Bank of India's six-member monetary policy committee to keep the repurchase rate unchanged at 6.5 per cent for a fourth straight time
The surge in the headline CPI inflation has expectedly proved to be transient. The print had cooled off to 6.8 per cent in August 2023 from the 15-month high of 7.4 per cent in July
The central bank is targeting to keep inflation between 2% and 6% but the consumer price index accelerated by 7.44% last month
Varma said rural demand was an issue, and a poor monsoon was as much of a growth shock as it was an inflation shock
Led by vegetables, food inflation in India soared to an over 3-year high of 11.5% in July. This pushed retail inflation to 7.44%, above the RBI's comfort band
The MPC, which has three members from the central bank and three external members, kept the repo rate unchanged at 6.50% in an unanimous decision
Various analysts that Business Standard spoke to put GDP growth in the range of 7 to 8.5 per cent for Q1 of FY24
MPC is prepared to act if required
RBI has kept the policy rate unchanged at 6.5 per cent
Inflation unlikely to fall to 4% target even in Q1 FY25; GDP growth projections kept intact