RBI: Benign inflation, global unrest called for growth-oriented policy

INFLATION IS EXPECTED to be well aligned to the Reserve Bank of India's (RBI) target of 4% in the current financial year, helped by cooling crude oil prices, said governor Sanjay Malhotra in the minutes of monetary policy committee (MPC) meeting released on Wednesday.

- Sachin Kumar

With inflation easing, the monetary policy needs to support domestic demand to further increase the growth momentum, he said.

"Overall, favourable factors for the inflation outlook outweigh those with possible adverse impact and should drive further disinflation in the headline CPI. It is expected that inflation will be well aligned to the target during the current financial year," said Malhotra.

The Consumer Price Index (CPI) inflation has shown a moderating trend in recent months, falling within the RBI's target band of 2-6%. Retail inflation slipped to a more-than-five-year low of 3.34% in March, driven by moderation in food prices.