Das said the spike in vegetable prices in July is starting to see a correction, led by tomato prices, pointing out that new arrivals are already softening prices. “We expect to see an appreciable slowdown in vegetable inflation from September,” he said, adding that the progress of monsoon in July has upped the prospects for the summer crop.

He also welcomed the “proactive supply management” in the case of onions.

Delivering the Lalit Doshi Memorial Lecture in Mumbai, Das said vegetable price shocks are short-term in nature and the monetary policy can wait for the “dissipation” of the first-round effects of the current spate of shocks. The headline inflation came down to 4.3 per cent in May but has since been rising, and also breached the upper tolerance level of 6 per cent in July because of the jolt from vegetable prices, particularly tomatoes.

“The frequent incidence of recurring food price shocks pose a risk to the anchoring of inflation expectations, which has been underway since September 2022,” Das said and stressed that the RBI will be watchful on this front.

“The role of continued and timely supply side interventions assumes criticality in limiting the severity and duration of such shocks,” he said.