Mumbai: The uncertainty surrounding global oil prices can have an adverse bearing on the inflation outlook though it will endeavour to bring it down to the target of 4 percent by 2016-17, the RBI said.
Last month, the RBI and the government had entered into an agreement to lower inflation to below 6 percent by January 2016 and further to around 4 percent by March next year. The Consumer Price Index-based inflation rose to 5.11 percent in January, from 4.28 percent in December. This is well within the target of 8 per cent for January 2015, RBI said.
The Reserve Bank can take comfort from the fact that inflation has declined at a faster pace than envisaged in the central bank’s policy issued in January last year. Going forward, RBI Governor Raghuram Rajan, in a statement issued today, said, “The RBI will seek to bring inflation rate to the mid-point of the band of 4 percent, (+/-) 2 percent provided for in the agreement, i.e., to 4 percent by the end of a two year period starting fiscal year 2016-17”.
