The rise in food prices, which sparked high inflation in June, aligns with the rate-setting committee's view that the fight against inflation will be prolonged, the Reserve Bank of India said on Monday.
"Food price spikes, typical of the onset of the monsoon, drove up headline inflation in June, corroborating the monetary policy committee's (MPC) view that the fight against inflation is far from over, and monetary policy has to stay the course on the arduous last leg of the journey to align inflation with the target," according to an article, State of the Economy, published in the central bank's July bulletin.
Authored by RBI officials, the article was accompanied by the customary disclaimer that views expressed are those of the authors and do not reflect the views of the organization.
In June, inflation measured on the Consumer Price Index (CPI) came in at 4.81%, higher than the 4.6% predicted by a Mint poll of 19 economists, primarily driven by food inflation.
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