RBI Bulletin: The Reserve Bank of India, the regulator of the banking sector, has expressed concern over the rise in food inflation in its monthly bulletin for the month of July. According to the bulletin, after a decline in inflation rate for three months, inflation has again increased in June 2024, for which the rise in vegetable prices is responsible, which is still rising.
The team led by RBI Deputy Governor Devvrat Patra wrote in the bulletin on inflation, it is argued that the rise in food inflation is temporary but the experience of the last one year does not prove this. This shock of inflation has not been for a short period but for a long period.
According to the article written in the bulletin, it is clear that the prices of food items have accelerated headline inflation and the inflation expectations of families have been jolted. This has not provided much benefit from the reduction in core and fuel inflation through monetary policy and supply management. According to the article, given the uncertainty regarding inflation, it would be wise to stick to the target of bringing CPI inflation to 4 percent. In fact, in the retail inflation rate data declared for the month of June, CPI inflation has been 5.08 percent due to the jump in food inflation.
According to the RBI bulletin, the second quarter of the financial year 2024-25 has started with signs of growth in the economy but inflation concerns remain. According to the article written about the economy, after the cash surplus in the beginning of June 2024, there has been a shortage of cash in the second fortnight due to advance tax payment and GST payment and sluggish spending by the government. However, after June 28, it came into surplus.
According to the RBI bulletin, by the end of March 2023, domestic financial assets have reached 135 percent of GDP while financial liabilities have been 37.8 percent of GDP. While net financial wealth has been 97.2 percent of GDP. Due to the surge in financial assets after the Kovid epidemic, net financial wealth has increased by 12.6 percent between March 2020 and March 2023. The bulletin said that most people’s wealth is in non-financial assets like housing, which has not been included in the article.
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