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      Question

      The RBI MPC in June 2026 projected CPI inflation at 5.1%

      for 2026-27. The quarterly inflation path projected was Q1: 4.2%, Q2: 5.1%, Q3: 5.9%, Q4: 5.4%. Which quarter is expected to see the peak inflationary pressure?
      A Q1 2026-27 Correct Answer Incorrect Answer
      B Q2 2026-27 Correct Answer Incorrect Answer
      C Q3 2026-27 Correct Answer Incorrect Answer
      D Q4 2026-27 Correct Answer Incorrect Answer
      E Inflation remains flat at 5.1% across all quarters Correct Answer Incorrect Answer

      Solution

      The RBI MPC June 2026 resolution states that Q3 2026-27 (October–December 2026) is projected to see the peak CPI inflation of 5.9%. The spike is primarily attributed to: (1) full pass-through of retail fuel price hikes (petrol up 7.4%, diesel up 8.4% cumulatively since May 2026) into the CPI basket; (2) second-round effects of higher global energy prices on input costs across sectors; and (3) potential food price pressures from the forecast sub-normal southwest monsoon. The MPC projects moderation from Q4 as supply-side pressures ease and monsoon impacts become clearer.

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