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    From SBI's Dinesh Khara to Nomura's Sonal Varma: Who said what on India's 17-month high retail inflation

    From SBI's Dinesh Khara to Nomura's Sonal Varma: Who said what on India's 17-month high retail inflation

    From SBI's Dinesh Khara to Nomura's Sonal Varma: Who said what on India's 17-month high retail inflation
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    By CNBCTV18.com  IST (Published)

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    From SBI's Dinesh Khara to Nomura's Sonal Varma, here's what top bankers, economists and market analysts have said on India's retail inflation which came in at 17-month high.

    India’s retail inflation or the Consumer Price Index (CPI) has soared to a 17-month high of 6.95 percent in March owing to rising prices of essential food items like 'oils and fats', vegetables and protein-rich items such as 'meat and fish'. Staying above the 6 percent mark for the third consecutive month, the CPI has topped the Reserve Bank of India's (RBI) upper retail limit of 4 percent with a 2 percent margin on either side. On a quarterly basis, the retail inflation during January-March works out to be 6.34 percent.
    Last week, the RBI had raised the retail inflation projection for the current fiscal to 5.7 percent from an earlier forecast of 4.5 percent. While the central bank hopes for moderation in prices of cereals and pulses on a likely record harvest of the winter season (rabi) crop, the excessive volatility in global crude oil prices since late February amid geopolitical tensions remains major risks to "any projection of growth and inflation".
    CNBC-TV18 spoke to several economists, top bankers and market analysts on India's inflation situation and here's what they said:
    Dinesh Kumar Khara, Chairman, SBI: “Inflation is also a function of multiple factors, which are observed at a point of time. It is something which was most expected considering the fact that the way the global factors were operating, so it was more or less in line. I hope that with the global factors, getting addressed more in terms of the Russia-Ukraine war, I think, perhaps, it could have an impact on the overall inflation going forward. But nevertheless, what you mentioned in terms of the negative interest rate for the depositors, sometime, last quarter itself, we had started increasing our term deposit interest rates.”
    Arvind Sanger, Managing Partner, Geosphere Capital Management: “Inflation is going to be a persistent problem globally, and India is no exception. And, frankly, RBI has been one of the most dovish, amongst the major central banks in the world, in terms of not moving. And now that the WPI has already been giving us warning signals here, it was running in the mid to low teens; 13-15 percent in the last several months and now CPI is starting to accelerate.”
    Nilesh Shah, MD, Kotak AMC: "What debt market will be looking forward to is the trajectory of inflation, does it remain elevated above RBI’s target level of 6 percent or does it start coming down as expected by the RBI, which is guided towards 5.7 percent inflation for FY23.”
    Sonal Varma, MD & Chief Economist-India, Nomura Financial Advisory & Securities: “Inflation was already tracking above 6 percent For FY23 prior to the upper surprise we have seen in March. There are a bunch of supply-side adjustments that are pending, demand-side pressures that are building up and second-order effects that will play out. We were expecting on average CPI inflation at 6.2 percent in FY23, given the upside surprise in the March reading we have revised up our FY23 average estimate to about 6.6 percent.”
    Ananth Narayan, Professor, SPJIMR: “It does look like we are going to have repeated 6 percent plus, I agree with 6.6 percent as well as a distinct possibility. In fact, the April print, by the way, might be higher than 7 percent given the oil price adjustment as well so watch out for all of that. Granted that we should be controlling inflation, that is the primary mandate of the MPC. Granted that remains the biggest important decision to be made but the problem with the monetary policy framework is it has become dangerously simplistic. The framework gives the impression you can keep CPI within a range merely by changing the repo rate. Macroeconomics is far more complicated than that, as the last two decades have shown and this is dangerously simplistic.”
    Rajnish Kumar, Former Chairman, SBI: “Repo rate, RBI has been holding but this time the stance has been different, it has been changed and if you look at the 10-year G-Sec, if you take representative 10-year G-Sec is representative and not the repo rate, then we have seen almost 125 basis point increase in last 15 months. So, that is a pointer itself that yes, there is an inflation building up and today, when you talk to anybody, this is one of the hottest topics about inflation. It is not only for the consumer, but for all the industry and we are seeing upward pressure on the prices, but again, not so much as to demand-driven, but the supply side driven.”
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