With rapid economic growth in our country, the food-consumption will rise in an unprecedented fashion since we are over a billion people. The food basket will also change. We have to augment food supplies within the country since marginal requirements or even a perception of shortfalls in domestic supply in our economy can have significant influence on world prices.
Before increasing the cash rate, the Board wants to see inflation sustainably within the 2 to 3 per cent target range. Meeting this condition will require a tighter labour market and stronger wages growth than we are currently forecasting.