NEW DELHI: In its April 2022 policy meeting, the Reserve Bank of India (RBI) is expected to prioritise growth over inflationary concerns. In particular, due to higher-than-expected vegetable costs in February, the consumer price index (CPI) inflation print has stayed excessive.
Furthermore, due to the Russia-Ukraine issue, inflation is projected to continue high in the coming months due to increasing crude oil prices.
Nonetheless, Motilal Oswal Financial Services expects the RBI to prioritise growth at its April 2022 monetary policy meeting, as "we believe growth is still a bigger issue than inflation at the moment." "Inflation in FY22 is expected to be in the region of 5.2-5.4 percent Year-on-year. " CPI inflation hit an eight-month high of 6.1 percent Year-on-year in February 2022, according to data released earlier this month. Furthermore, food inflation reached a 15-month high of 5.8 percent Year-on-year in February 2022, up from 5.4 percent a month earlier.
"Vegetables were primarily responsible for the increase in inflation within food, as the CPI came in at 6.1 percent Year-on-year, which was close to the level recorded in January 2022." "Other commodities with a 17 percent weight in the CPI index, such as grains and products, meat and fish, spices, and sugar and confectionary, also contributed to greater inflation." Fuel and power inflation, on the other hand, fell to a 10-month low of 8.7 percent Year-on-year in February 2022.
India's foreign exchange reserves fell by USD9.64 bn, the most in two years