RBI bulletin: CPI inflation rises to 3.5%, core steady at 3.7%
Headline inflation inched up on food costs, but underlying pressures remained contained. Net FDI stayed positive for a second month.
What changed
- CPI inflation rose to 3.5% in April from 3.4% in March, driven by food
- Core inflation (ex-food and fuel) held steady at 3.7%
- Net FDI remained positive for second consecutive month in March
The read
The RBI's State of the Economy article presents a cautiously optimistic picture. CPI inflation edged up to 3.5 per cent in April, driven by food, but core inflation held at 3.7 per cent, indicating limited pass-through of input costs. Net foreign direct investment remained positive for a second consecutive month in March, a bright spot amid continued FPI outflows. The trade deficit widened on higher oil and gold imports. System liquidity eased but stayed comfortable, with the WACR below the repo rate. The RBI sees resilience despite global headwinds, but the rupee's depreciation and elevated crude prices are risks. The verdict: inflation is manageable, but the external sector warrants close watch.
Key numbers
- CPI inflation (April): 3.5%
- Core inflation (April): 3.7%
- Net FDI (March): positive for second month
- Trade deficit (April): widened over March
Primary source: rbi.org.in