Continuous irregular rains in the country are increasing the risk of inflation in future – BOB Economic Research Department
The Economic Research Department of Bank of Baroda (BoB) is of the view that erratic rains across the country have resulted in lower kharif sowing this year and this may increase inflation in the near future. The report prepared by the department said that till July 30, while rainfall in some areas has been six per cent more than the average, the eastern and northeastern regions of the country have received less rainfall. More than normal rainfall has been recorded in North-West India. As a result of all this, Kharif sowing has been affected this year and pulses sowing has registered a decline as compared to last year. For these reasons, inflation may increase in the near future.
Explain that the Indian Meteorological Department estimates that El Nino conditions may develop during the monsoon. The country’s retail inflation has risen to a three-month high of 4.81 percent, while wholesale inflation has come down to 4.12 percent.
The meeting of the RBI-led six-member Monetary Policy Committee (MPC) is to be held from August 8 to 10. In the MPC meeting held in June, the RBI had kept the repo rate (the interest rate at which the central bank lends to other banks) unchanged.
