How 99.6% onion price spike & El Nino risks may pose challenges to RBI's Dec rate decision
Executive Brief • Key Highlights
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- ✓Onion prices surged 99.6% as food inflation and El Niño risks may push CPI near 6% before the RBI’s December rate call.
- ✓Bank of Baroda said food prices remain a key risk.
- ✓"However, a lot is dependent on how the impact of El Nino plays out in states where rainfall is deficient."
Story at a Glance
- Category
- Indian Markets
- Reported By
- Financial Express
- Reading Speed
- 6 Minute(s)
- Market Focus
- India Economy
Onion prices surged 99.6% as food inflation and El Niño risks may push CPI near 6% before RBI's December rate call. Read what's at stake.
Economists at Bank of Baroda (BoB) expect CPI inflation to settle at 6% in October, with risks tilted to the upside. Core inflation (CPI excluding food and fuel) is likely to remain in the range of 4.6-4.8%.
Bank of Baroda cited higher prices of essential food items such as rice, pulses, edible oils and milk. It expects inflationary pressures to persist in November as well, with food prices emerging as a key risk to the outlook.
"However, a lot is dependent on how the impact of El Nino plays out in states where rainfall is deficient," Bank of Baroda noted.
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Financial Express
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