Earlier this month the RBI raised its 2021/22 inflation forecast to 5.7% from 5.1% and reiterated that it will continue to keep monetary policy accommodative as long as necessary to revive and sustain growth on a durable basis.
The Monetary Policy Committee decided to stick to the objective of reviving growth over reacting to inflation as its approach is to gradually tackle the prospects of impacting output rather than a `sledge hammer approach that would kill the nascent recovery.
"There s a material drop in edible oil and palm oil prices after tariff reductions and global oil price volatility has eased as well," said Rajni Thakur, chief economist at RBL Bank.