”For 2017-18, inflation is projected to average 4.5 per cent in the first half of the year and 5 per cent in the second half,” said the RBI's first bi-monthly monetary policy statement for 2017-18. Risks are evenly balanced around the inflation trajectory at the current juncture and there are upside risks to the baseline projection, it said. ”The main one stems from the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Niño event around July-August, and its implications for food inflation,” RBI said, as it kept the key interest rate unchanged for the third time in a row. On the downside, RBI said international crude prices have been easing recently and their pass-through to domestic prices of petroleum products should alleviate pressure on headline inflation. While food prices bottomed out at the preceding month’s level, base effects pushed up inflation in this category.

Source: The Telegraph April 06, 2017 12:00 UTC