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Upside risks to CPI inflation more than downside risks: RBI discussion paper

The RBI releases a working paper titled ‘Tail Risks of Inflation in India’

January 12, 2023 / 05:00 PM IST
The Reserve Bank of India (Photographer: Dhiraj Singh/Bloomberg)

The Reserve Bank of India (Photographer: Dhiraj Singh/Bloomberg)

A discussion paper from the Reserve Bank of India (RBI) on January 10 said the upside risk to the consumer price index (CPI) inflation is relatively more than the downside risks to it.

“In the flexible inflation targeting (FIT) period, upside risks to CPI headline inflation have declined to a level of 6.5 percent from a double-digit level preceding it and have remained stable,” the discussion paper said.

It further added that since there is a downward shift in the conditional distribution, the downside risks to inflation have increased and have remained around 1.5 percent.

The RBI released the working paper titled ‘Tail Risks of Inflation in India’, which was co-authored by Silu Muduli and Himani Shekhar.