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Retail Inflation Likely To Be 18 Months High Above 7.50% In April 2022, EMI Likely To Be More Costly

Retail Inflation Likely To Be 18 Months High Above 7.50% In April 2022, EMI Likely To Be More Costly
Written by Arindam
Retail Inflation Likely To Be 18 Months High Above 7.50% In April 2022, EMI Likely To Be More Costly

Retail Inflation To Remain High: Retail inflation may cross 18-month high. The retail inflation data for April 2022 will be announced on Thursday, 12 May 2022. In which it is being estimated that due to high prices of food items and expensive fuel, the retail inflation rate may cross the figure of 7.50 percent. Whereas in the month of March, the retail inflation rate was 6.95 percent. If this happens, then retail inflation will be the highest level in 18 months. Also, it will be much higher than the RBI’s tolerance level of 6 per cent. Announcing the monetary policy in April, the RBI has projected the inflation rate to be 5.7 percent in 2022-23.

Rising inflation due to expensive fuel
Due to the Russia-Ukraine war, there has been a jump in the price of crude oil. From 22 March 2022, government oil companies started increasing the prices of fuel, after which petrol diesel has become costlier by Rs 10 per liter. Expensive diesel means expensive transportation. Due to this, there has been a jump in the prices of many commodities. So from April 1, the prices of domestic natural gas have been doubled, due to which PNG to PNG has become expensive. Due to the Russo-Ukraine war, many items ranging from edible oil have become expensive.

Increase in retail inflation will make loans costlier
On May 4, the RBI had announced an increase in the repo rate by 40 basis points. Apart from this, the Central Bank also increased the Cash Reserve Ratio (CRR) by 50 basis points. The effect of this was that one after the other, from banks to housing finance companies, all types of loans from home loans to home loans are getting expensive, so the EMI of old customers who have taken loans is getting expensive. And if the retail inflation rate for the month of April crosses 7.5 percent, then during the bi-monthly loan policy review in June, the RBI may announce to make loans expensive again. That is, the repo rate can be increased even more.

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Arindam

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