Rama Krishna Sangem
Reserve Bank of India (RBI) is afraid that extreme weather conditions in the coming days may push inflation further up in the country. Extreme weather conditions may pose a risk to inflation, along with prolonged geopolitical tensions that could keep crude oil prices volatile, the Reserve Bank’s April Bulletin said on Tuesday.
The retail based on the Consumer Price Index (CPI) has eased to 4.9 per cent in March after averaging 5.1 per cent in the preceding two months. The Reserve Bank, which mainly factors in CPI while arriving at its bi-monthly monetary policy, has kept the key interest rate unchanged at 6.5 per cent since February 2023, citing concerns on the inflation front.
An article on ‘State of the Economy’ published in the Bulletin further said global growth momentum has been sustained in the first quarter of 2024, and the outlook for world trade is turning positive. Treasury yields and mortgage rates are ticking up in major economies as expectations of interest rate cuts are being pared.
RBI bought $8.56 billion in Feb
“In India, conditions are shaping up for an extension of a trend upshift in real GDP growth, backed by strong investment demand and upbeat business and consumer sentiments,” the article said. The RBI, however, said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India.
The Reserve Bank of India (RBI) bought $8.56 billion on a net basis in the spot foreign exchange market in February, data released as part of the central bank’s monthly bulletin showed. The RBI did not sell any dollars in the spot market in February. In January, the central bank had bought a net of $1.95 billion in the spot market.
The Indian rupee appreciated by 0.2% against the dollar in February. The unit traded in a range of 82.8225 to 83.1150. The RBI’s net outstanding forward purchase stood at $9.69 billion as of end-February, compared with a net purchase of $9.97 billion at the end of the previous month, the data showed.
The central bank intervenes in the spot and forwards market to curb exchange rate volatility. The domestic currency settled at 83.3425 on Tuesday, after hitting a record low of 83.5750 last week
