Inflation may be at danger due to extreme weather: RBI

Delhi, New: The Reserve Bank’s April report on Tuesday said that extreme weather patterns and ongoing geopolitical tensions might both be risks to inflation and keep crude oil prices unstable.

Based on the Consumer Price Index (CPI), the retail sector shrank to 4.9% in March from an average of 5.1% in the two months before.

Since February 2023, the Reserve Bank, which primarily considers CPI when determining its bi-monthly monetary policy, has maintained the benchmark interest rate at 6.5%, citing inflationary worries.

The bulletin’s “State of the Economy” feature went on to say that the momentum for global growth continued in the first quarter of 2024 and that things were looking well for international commerce.

In many economies, mortgage rates and Treasury yields are rising as hopes of interest rate reduction are dwindling. “Strong investment demand and positive business and consumer sentiments are supporting an extension of a trend upshift in real GDP growth in India,” the paper said.

The Reserve Bank of India, however, said that the opinions stated in the bulletin are those of the writers and do not necessarily reflect the opinions of the RBI.