Burden of Crude Oil Import Bill may Affect Interest Rate Cut

Economy News National News

Business Mantra News

Firming of crude oil prices in the Global market is likely to affect retail inflation which has started to move northwards after hitting a low of 1.46 per cent in June, 2017.

It will obviously impact on crude oil price in India and increase inflation in the country.

RBI too has raised its inflation projection to 4.2 per cent to 4.6 per cent by March 2018 due to firming up of crude oil prices in the domestic market.

RBI may hold its interest rate revision and there may not be cut in interest rate at least till March, 2018.

Besides crude oil, another reasons for increase in inflation is the implementation of the 7th Pay commission and increase in the Pay & Allowances of the Government employees.

The inflation may go up to 4-4.5 per cent in the next year which is higher than expected 4 per cent for this fiscal year.

The RBI while reviewing its monetary policy determined a range between 1.46-4.88 per cent in 2017.

RBI aims to achieve a minimum target of 4 percent for retail inflation.

It aims to achieve a medium-term target of 4 per cent for retail inflation with band of plus/minus 0.2 per cent.

Ranging between 0.90-6.55 per cent, wholesale price based WPI inflation adopted a reverse curvy path in 2017.

Union Government and RBI has to intervene to step up measures to curb inflation, so that common people are not affected with these bottlenecks.

About the author