RBI's Letter Apologizes For Failure To Meet Inflation Target and Blames Global Factors

The war in Ukraine and the increase in energy and food prices are among the main reasons cited . The detailed report lacks much focus on the future, only stating that the worst of inflationary pressures are likely behind us .

According to people familiar with a letter sent by the monetary policy committee to the government, interest-rate setters at the Reserve Bank of India have mainly blamed global causes for failing to achieve their inflation target.The war in Ukraine and the consequent increase in energy and food prices, as well as supply disruptions due to the pandemic, are among the main reasons cited, the people said, asking to remain anonymous since the correspondence is private.The detailed report lacks much focus on the future, only stating that the worst of inflationary pressures are likely behind us, according to the people.The contents of the letter was released earlier this month, after India's consumer inflation soared to the upper limit of the 2%-6% range for three consecutive quarters.

According to economists polled by Bloomberg, the benchmark repo rate would rise to 6.4% from 5.9% today, and inflation is expected to drop to about 5% in a year from 6.8%.An RBI email for criticism was sent but it was not immediately acknowledged.

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