RBI projects retail inflation at 5.1% in 2021-22

RBI governor Shaktikanta Das. (Mint) — RBI governor Shaktikanta Das. **(Mint)**

1 min read . Updated: 04 Jun 2021, 11:16 AM IST Livemint

The impact on economic activity is expected to remain contained due to lower restrictions amid the second wave of Covid-19 pandemic, the RBI Governor said

The Reserve Bank of India (RBI) also projected consumer price index (CPI) inflation at 5.1 per cent for FY21-22. "Adequate system level liquidity has been ensured and targeted liquidity to stressed entities have been provided," said Das.

The impact on economic activity is expected to remain contained due to lower restrictions amid the second wave of Covid-19 pandemic, the RBI Governor said.

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"Taking into consideration all these factors, CPI inflation is projected at 5.1 per cent during 2021-22: 5.2 per cent in Q1; 5.4 per cent in Q2; 4.7 per cent in Q3; and 5.3 per cent in Q4 of 2021-22, with risks, broadly balanced," Shaktikanta Das said.

The government has retained the inflation target at 4 per cent with the lower and the upper tolerance band of 2 per cent and 6 per cent, respectively, for the next five years (April 2021 - March 2026).

The RBI also kept the repo rate (the key lending rate) unchanged at 4 per cent and the reverse repo rate (the borrowing rate) at 3.35 per cent.

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