RBI may be compelled to hike rates sooner as March inflation spikes To 6.95%

The RBI may be forced to act faster on policy tightening after data showed retail inflation spiked sharply to nearly 7 per cent in March, and the fallout of the Ukraine war pushing energy rates higher was expected to add to the already spiralling price pressures.

Indeed, after repeated messages that the central bank was focused more on growth and that inflation was transitory, the Reserve Bank of India, at its recent meeting, reluctantly shifted its policy towards bringing inflation under control.


That shift in the central bank’s focus was even before the latest data, which showed retail inflation, calculated based on the consumer price index (CPI), held above the RBI’s upper end of the 2-6 per cent target band for the third straight month.