Unseasonal rains affect Kharif crops, impacting food inflation: SBI survey | Economic News | Rare Techy

New Delhi: Unseasonal rains in some parts of India in October may have a major negative impact on food inflation in the coming months, said SBI Research in its latest Ecowrap report. The report said that these unseasonal rains “have a significant impact on Kharif crops”. Kharif crops are mostly planted in the monsoon season – June and July, and the produce is harvested in October and November.” percent of the normal rainfall in October so far,” she said.

He believes that along with grains, prices of vegetables, milk, spices and edible oils, which make up a quarter of the overall Consumer Price Index, are rising and likely to remain high in the coming months.” In 2019, while India’s October rainfall was 44 percent above normal, the 3-month average food CPI was 10.9 percent against 4.9 percent in the previous 3 months.” For the record, India’s retail inflation in September The rate was 7.41 percent in September, up from 7.41 percent last month, thus keeping the Reserve Bank of India’s benchmark interest rate at 2-6 percent for the third straight quarter.

Under the flexible inflation targeting framework, the RBI is deemed to have failed to manage inflation if CPI-based inflation is outside the 2-6 percent range for three consecutive quarters, which then requires explain central bank. The central government is unable to control the price rise.

Against that backdrop, the Reserve Bank of India has called for an additional and external monetary policy meeting on November 3. The meeting was called under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934. RBI said in a statement on Thursday. This section of the RBI Act deals with steps to be taken if the central bank fails to meet its inflation targeting mandate.

On the external MPC meeting, the SBI Research report said that it is only part of the regulatory mandate and it does not anticipate that another agenda will be announced at the meeting, although it is scheduled a day after the US Fed. Meet on November 2.” However, looking at the previous unscheduled meetings of the MPC on March 20 and May 22, there was no prior press release for such meetings and the announcement of the rate decision was unscheduled in the truest sense. ,” SBI Research. added