Persistent Core Inflation May Influence Retail Inflation Numbers: Reserve Bank
NDTV
India's external sector is facing strong global headwinds from rising risks of global slowdown, still elevated commodity prices and volatility in capital flows, RBI's Financial Stability Report said.
India's consumer price index (CPI) inflation has moderated, but the persistence and broadening of core inflation may continue to exert upward pressure on the headline number going forward, the Financial Stability Report released today said.
The Financial Stability Report includes contributions from all financial sector regulators in the country and is published bi-annually by the RBI on its website.
India's headline retail inflation dropped to a 11-month low of 5.88% in November from 6.77% in the previous month. Excluding the volatile food and energy components, core inflation was between 6% and 6.26% in November, according to three economists' estimates, versus 5.9% to 6.3% in October.
"Front-loaded monetary policy actions are expected to bring inflation into the tolerance band and closer to the target while anchoring inflation expectations," the RBI said.
