RBI Policy
Excerpts on inflation from MPC's statement
This story was originally published at 12:09 IST on 7 October 2026
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MUMBAI - Following are the excerpts on inflation from the statement issued by the Reserve Bank of India Wednesday at the conclusion of the Monetary Policy Committee's fourth bi-monthly meeting for 2026-27 (Apr-Mar):
CPI inflation increased to 4.8% in August 2026 from 4.5% in July. This was largely driven by higher inflation in food and fuel components. Food price increases have become more broad-based, along with notable spikes in certain items such as sugar and onion. Fuel inflation inched up in August mostly due to unfavourable base effects. Core inflation also increased to 4.2% in August after remaining unchanged at 3.9% for three consecutive months. Core inflation, excluding precious metals, increased to 2.9% in August. Broadening of price pressures was visible in the diffusion indices as the weighted share of items recording inflation above 4% increased to about 37% in August 2026.
The near-term outlook on inflation points towards continued pressures from the supply side, on account of the deficient south-west monsoon, El Nino conditions and high volatility in international oil prices. Price pressures are increasingly becoming visible across a range of commodities within the food component, apart from oil. In addition, early signs of inflation becoming generalised are also evident from the increase in core inflation and higher inflation across a larger segment of the CPI basket.
Considering all factors, CPI inflation for 2026–27 (Apr-Mar) is projected to be 5.2%, with Jul-Sept at 4.9%, Oct-Dec at 6.0%, and Jan-Mar at 5.7%. Inflation for the first quarter of FY28 is projected at 5.6% with risks being evenly balanced. Core inflation is projected at 4.4% for FY27.
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Compiled by Nandini Sinha
Filed by Himanshi Gupta
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