The inflation numbers have now stayed within the Reserve Bank of India’s (RBI) tolerance band of 2-6% for a second straight month.
In November, inflation figures had slowed to an 11-month low of 5.88% on back of moderating food prices and a favourable base effect, bringing much-needed relief from stubborn price pressures and triggered prospects of less aggressive interest rate hikes in the months ahead.
In its December monetary policy meet, RBI governor Shaktikanta Das had said that RBI would continue its fight against inflation despite the worst being “behind us”, suggesting the central bank was likely to remain hawkish in the near term.
Das had said inflation is cooling across the world on softening of the commodity and the oil prices, but stressed that we cannot be “complacent” despite the positive news on inflation.
Meanwhile, RBI deputy governor Michael Patra had said RBI’s efforts will be first focused on getting inflation into the tolerance band of under 6%, and added that the lowering of the quantum of the hikes at 35 basis points as against 50 basis points earlier should be seen as a signal which the central bank is sending out.