Exclusive: High inflation temporary, unlikely to guide RBI rate decision, says Dinesh Khara

The inflation trend is not in the range which will probably guide the central bank, Khara said.

State Bank of India (SBI) Chairman Dinesh Khara on August 25 said the high inflation is a temporary trend and it will not guide the Reserve Bank's upcoming policy decision.

“The inflation trend is not in the range which will probably guide the central bank, and they will be consuming data points before they go ahead. It’s only for a month or two unless and until any trend is seen,” Khara told Moneycontrol on the sidelines of the B20 Summit in New Delhi.

This comes after India's headline retail inflation rate crashed past the upper bound of the Reserve Bank of India's (RBI) 2-6 percent tolerance range in July and shot up to a 15-month high of 7.44 percent, spurred on by a massive increase in vegetable prices, data released by the Ministry of Statistics and Programme Implementation on August 14 showed.

At 7.44 percent, the Consumer Price Index (CPI) inflation print for July is a huge 257 basis points higher than the revised June number of 4.87 percent and is the 46th month in a row that it has come in above the RBI's medium-term target of 4 percent.

One basis point is one-hundredth of a percentage point.