RBI MPC Meet: Committed to bring inflation back to target of 4% on a durable basis, says RBI governor

RBI governor Shaktikanta Das on June 7 said that the central bank remains committed to bring inflation back to target of 4 percent on a durable basis. The Reserve Bank also retained Consumer Price Index (CPI) inflation projection for FY25 unchanged at 4.5 percent.

The decision was announced by RBI Governor Shaktikanta Das after the Monetary Policy Committee (MPC) meeting held from June 5 to 7. Deflation in fuel prices is ongoing, food inflation remains elevated, said Das.

Private consumption is recovering with steady discretionary spending in urban areas, said Das, adding investment activity continues to gain traction.

The RBI governor noted that vegetable prices are currently on the rise for the summer season. He attributed the deflationary trend in fuel prices mainly to cuts in LPG prices. Furthermore, he highlighted the global trend of increasing food prices, indicating a shift in the broader market dynamics.

“FY25 domestic economic activity has maintained resilience,” Shaktikanta Das said.  “Headline inflation continues to be in a disinflation trajectory; repeated food price shocks slowed down disinflation process,” Das added.

Normal south-west monsoon expected to boost kharif production, enhance water storage in reservoirs, he added.

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