Retail inflation in India cool down to RBI’s tolerance band

Retail inflation in India cool down to RBI’s tolerance band

The Ministry of statistics has released its data about India’s inflation which shows India’s retail inflation down to 5.02 per cent in September on an annual basis as against 6.83 per cent in August.

The prices deflated 1.13 per cent. The food price inflation for September registered at 6.56 per cent as 9.94 per cent in August. The rural and urban inflation are recorded at 5.33 per cent and 4.65 per cent, respectively.

Inflation in daily consumptions:

Inflation rate for vegetable has seen decline significantly to 3.39 per cent in September from 26.14 per cent in August.

Cereal inflation is registered at 10.95% in the month of September while the fuel and light segment deflated 0.11% in September.

Regarding core inflation (CPI excluding food and fuel), expectations stood at 4.9 per cent for the September quarter.

With the long-term inflation expectations, the RBI has determine its 2024-25 CPI target at 4.5 per cent, which remains above the mandated target of 4 percent.

Concern of oil prices over Israel-Hamas conflict:

The Israel-Hamas conflict lends to the concerns of oil prices exceeding current assumptions, which could subsequently exert pressure on inflation.

Despite uneven monsoon patterns and a cautious outlook on food prices amidst rising global crude oil costs, the RBI’s Monetary Policy Committee (MPC) has not change its inflation forecast for this fiscal year at 5.4 per cent in recent meeting.

It is the fourth time when MPC unanimously decided to maintain the repo rate at 6.5 percent.

The MPC underlined that the moderation in CPI headline inflation reflects the cumulative impact of monetary policy tightening, supply-enhancing measures, and the full effects of previous rate hikes, which are expected to keep inflationary pressures in check in the coming months.

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