Vegetable price decline gives RBI room to hold rates
The timely fall in vegetable prices is likely to lead the Reserve Bank of India to temper the tone of its monetary policy statement, which is due on April 5 and also give the central bank more room to hold off raising interest rates. The impact of the crash in prices of vegetables, including onions, tomatoes, cauliflower, cabbages, is expected to last at least until June, which in turn will lead to inflation undershooting RBI`s projection of 5.1-5.6 percent for April-September
Food inflation has long been volatile in India, a country where farming is still carried out by small households, making supply uneven and unpredictable. Image source: Reuters