Reserve Bank of India Governor Shaktikanta Das on Friday affirmed that the central bank would closely monitor vegetable prices, potentially affected by the forecasted high-temperature conditions by IMD.
Earlier this week, the Indian Meteorological Department (IMD) forecasted heatwaves in numerous regions of the country for the summer season spanning from April to June.
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“So we have to watch what impact it has on food crops, and I have mentioned key vegetables. On the wheat crop, our information is that by and large, the harvesting is over. In the central part of India it’s fully over and even in other places also, by and large, wheat harvest is over,” he said after the announcement of the first bi-monthly monetary policy for 2024-25.
He said, wheat availability will not be affected as much as it was two years ago when heat wave conditions were starting in March.
“So in wheat, there is not much worry, not so much concern. But vegetable prices will have to be watched. Any other impact that heat wave conditions may produce,” he said.
He noted that the last mile of disinflation is always challenging and sticky.
Speaking on the issue, RBI Deputy Governor M D Patra said food inflation has been highly volatile and is expected to remain high because of adverse climatic conditions.
Reserve Bank, however, has retained the retail inflation forecast at 4.5 per cent for the current fiscal.
“Assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5 per cent,” the RBI governor said.
Although RBI retained the full-year inflation projection, it tweaked the forecasts for the quarter.
RBI forecasted April-June quarter inflation at 4.9 per cent and in the September quarter at 3.8 per cent.
For December and March quarters, inflation is projected at 4.6 per cent and 4.7 per cent, respectively.
(With PTI inputs)
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