Retail Inflation breaches MPC Limit Mandated by RBI

April 13, 2022
Current Context: Retail inflation CPI (c) has reached 6.95 % surpassing the bandwidth set by the Monetary Policy Committee.
Retail Inflation breaches MPC Limit Mandated by RBI
  • The Retail Inflation i.e Consumer Price Index (Combined) has breached the 2 -6 % limit and now stands at 6.95 %. CPI (c) is used to calculate retail inflation. The data released by NSO shows above 6 % inflation for 3 consecutive months.
  • Headline inflation that is inclusive of both the food and fuel has been on an exponential path ever since the pandemic. Inflation across oil and fat, vegetables, clothing and footwear, and housing has been on a rise following the disruption of the global supply chain.
  • Govt of India has established a Supply chain Resilience Network to keep her imports under continuity and control. The Ukraine crisis has further added fuel to the rising crude oil prices.

Question:

Q.1 What is the target of RBI vis-a-vis retail inflation?
a. 2 - 4 %
b. 2 - 6 %
c. 4 - 6 %
d. 2 - 5 %

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