Inflation

Interest rates will remain within the range of 5.25 percent to 5.5 percent, following a series of rate increases that began in March 2022, aimed at curbing inflation and bringing it below the target rate of 2 percent.

According to the latest adjustments, the price of a 19 kg commercial LPG cylinder in Delhi has risen to Rs 1,833, up from the previous Rs 1,731. This recent hike follows a Rs 209 increase per cylinder on October 1.

"The Government’s decision to impose Minimum Export Price of $800/ton on onion with effect from 29th October 2023 till 31st December 2023 to discourage exports and maintain availability in domestic markets has shown an immediate impact of price correction in Maharashtra markets, where prices recorded a decline of 5 per cent to 9 per cent from the highest price registered during last week," an official statement said.  

While the staple vegetable was selling at Rs 35 to 40 per kg last week, the prices are touching Rs 50-80 across Delhi-NCR now.

The MPC, in its policy review meeting, had retained the key repo rate at 6.5 percent, reiterating willingness to act against inflation.

Food inflation, which accounts for close to half of the overall consumer price index (CPI), slowed to 6.56 per cent in September from 9.94 per cent in August. There was a sharp correction in the prices of vegetables, such as tomatoes and onions. 

“We believe all eyes rest on festive demand in the coming couple of months for the market to sustain momentum. 2Q24 will show the impact of volatile monsoons, flash floods in July and delayed recovery in rural and consumer demand in a few segments,” the research said.

They said it is a bit early to comment on the impact as the situation has to be monitored.

The South Asian nation faces an uphill task when it comes to economic recovery under a caretaker government following the approval of a $3 billion loan by the International Monetary Fund in July.

The Sensitive Price Indicator-based inflation increased by 0.93 per cent for the week ending on September 21 as compared to the previous week, the PBS data revealed.