Inflation Expected To Be Well Aligned To The Target During The Current Financial Year, Notes Rbi Minutes

With inflation decisively around 4 per cent target, the monetary policy needs to nurture demand impulses to boost growth amid uncertain global environment, according to the members of the Reserve Bank's rate setting panel while delivering another 25 bps rate cut earlier this months, showed minutes of the meeting released on Wednesday. Governor Sanjay Malhotra-headed Monetary Policy Committee (MPC) had reduced the short-term lending rate by 25 basis points to 6 per cent on April 9. A similar reduction was done in February. Coming to the imposition of tariffs, in my view, the implications for inflation are two sided, RBI guv said. On the upside, uncertainties may lead to possible currency pressures resulting in imported inflation. On the downside, slowdown in global growth will further soften commodity and crude oil prices, which would ease the pressure on inflation. Overall, favourable factors for the inflation outlook outweigh those with possible adverse impact and should drive further disinflation in the headline CPI. It is expected that inflation will be well aligned to the target during the current financial year, he noted.

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