INSUBCONTINENT EXCLUSIVE:
members expressed concerns on rising inflation.
The factors they had cited include higher oil costs, higher minimum support prices, elevated
household inflation expectations, risks of domestic fiscal slippage, and volatilities in emerging markets.
Deputy Governor Viral Acharya
pointed to the risks of rising fuel prices as oil heads beyond $80 to a barrel
dissenting voice seeking a rate hike, pointed to rising household inflationary expectations
is extremely important in an inflation-targeting regime.
Members also warned about the risks associated with the higher house rent
and the HRA still persist, although the latter has somewhat moderated
Risks due to an increase in state level HRAs and input prices also prevail
monetary policy department Michael Patra said that though both household and professional forecasters have lowered their inflation
be reflected in a proactive policy stance
changing the RBI stance, said that although the rupee has weakened, the depreciation is lower in terms of trade weighted nominal effective
exchange rate (NEER).
He also argued that although oil prices are rising, it has a lagged effect on inflation due to revisions in domestic
taxes and productivity improvements, which could offset the rise in prices.
