Hike In Food Prices Across Country, RBI Expects Inflation To Fall Below 4 % In FY21

New Delhi: The Monetary Policy Committee (MPC) set up by the Reserve Bank of India (RBI) has predicted a slump in total inflation below the target of 4 per cent by Q3 and Q4 of FY21.

Amid the nationwide lockdown, the supply of food items was severely impacted, which triggered the food inflation to peg at 8.6 per cent in April, according to a data by the National Statistical Office (NSO).

Besides, the disruption of supply chain will continue to impact food prices for the next few months if the lockdown is not lifted and supply chain is not restored, as per MPC.

“The elevated levels of pulses inflation are worrisome and warrants timely and swift supply-side interventions including a reappraisal of the import duties,” RBI Governor Shaktikanta Das said in a press conference on Friday.

Moreover, the Food Corporation of India (FCI’s) steps to offload excess food stock into the market from the Public Distribution System (PDS) can also control cereal prices and create room for rabi procurement, he added.

Since both the demand and supply are impacted amid the lockdown, this will hinder the economic activities in the first half of the current fiscal year, the governor said.

Also Read: RBI Cuts Repo Rate By 40 bps, Projects Negative GDP Growth In FY21

Also Read: RBI Relief: Borrowers Can Extend Loan Repayment Till August 31