Recalcitrant jumbo: On inflation
The RBI’s Monetary Policy Committee (MPC) has for an eighth consecutive meeting chosen to leave the benchmark repo rate unchanged at 6.50% on concern that ‘elevated food inflation could derail’ its efforts to ensure durable price stability. Governor Shaktikanta Das, who had just two months ago spoken of the ‘elephant’ of inflation having begun its journey back to the forest after going on a walkabout, flagged the risk that stubborn food price gains pose to the overall disinflation path as justification for the MPC’s stand. Food inflation as measured by the Consumer Food Price Index accelerated to a provisional 8.7% in April, from March’s 8.52%, and recent indicators such as Crisil’s food plate costs suggest that price gains spurred by a surge in tomato, onion and potato prices may have ...