Moody’s analysis on India’s inflation says, “uncomfortably high”: Current Affairs Special Series

Team Adda247 and BankersAadda are here with a Current Affairs Special Series for SBI and IBPS interview 2021.  In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack if any current affairs topic is asked in the interview. Today’s Current Affairs topic is the Moody’s analysis on India’s inflation says, “uncomfortably high”.

Moody’s analysis on India’s inflation says, “uncomfortably high”

According to a report from Moody’s analytics that India’s inflation was above its comfort levels, even in most Asian countries have inflation low or depressed. Higher fuel prices are expected to keep pressure on the upside on the headline consumer price index (CPI), leaving no further space for rate cuts from the Reserve Bank of India.

Indian inflation was alarming as retail inflation jumped up to 5% in February which was 4.1% in January, posing an additional challenge to policymakers, the report titled, ‘Macro Roundup: Is Inflation the Next Worry in Asia?’ said. Volatility in food prices and increasing oil prices led India’s CPI to surpass the band of 6% several times in 2020, obstructing the RBI’s ability to keep accommodative monetary settings in place during the height of the pandemic,” The intelligence arm of the global rating agency said. 

Brent crude was climbed to 26% this year and was sitting around $64 per barrel compared to around $30 per barrel in March 2020, when the Covid-19 crisis was near its peak, the report said. The RBI is expected to maintain its policy rates during the first bi-monthly monetary policy review of Financial Year 2022 which will be on the 7th of April.

Central Bank has targeted inflation currently a band of 2-6% which was set to expire. An analytical report of Moody’s said it expects the RBI to hold the same inflation band after March 31. This report also highlighted that retail inflation clutch above the RBI’s 4% target for eight months during the last year, with food being a key driver of inflation, representing 46% of the CPI basket.