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Pressure on food prices to ease with monsoon onset: RBI

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RBI Governor Shaktikanta Das has said that a normal Southwest monsoon will have a “soothing impact” on current inflationary pressures on food prices in India, according to a PTI report.

Noting that the overall outlook for the economy is highly uncertain and clouded with downside risks, Das offered a slew of relief and liquidity measures to individuals and small businesses apart from a Rs 50,000 crore special liquidity window to the healthcare sector.

Pointing out that retail inflation edged up to 5.5 per cent in March 2021 from 5 per cent in February on the back of a pick-up in food as well as fuel inflation while core inflation remained elevated, he said inflation trajectory over the rest of the year will be shaped by the pandemic infections and the impact of localised containment measures on supply chains and logistics.

“Going forward, a normal Southwest monsoon, as forecast by the IMD, should help contain food price pressures, especially in cereals and pulses and help sustain rural demand and overall output in FY22 while also having a soothing impact on inflation pressures. The build-up in input price pressures across sectors, driven in part by elevated global commodity prices, remains a concern, though,” PTI quoted Das as saying.