The Reserve Bank of India (RBI) on Thursday said inflation is expected to be at elevated levels during the second quarter, but may ease in the second half of the current fiscal year.
Supply chain disruptions persist, resulting in inflation pressures across segments, RBI Governor Shaktikanta Das said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC).
He also said that global economic activity has remained fragile and the surge in COVID-19 cases has subdued early signs of revival.
Pinning hope on the agriculture sector, he said, Kharif crop harvest is expected to boost rural demand.
Economic activity had started to recover, but a surge in coronavirus infections has forced imposition of lockdowns, he added.