Retail Inflation: Retail inflation dips to 6.77% in October from 7.41% in September


Retail Inflation

Retail Inflation
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Retail inflation eased to a three-month low of 6.77 per cent in October. This is lower than the five-month high of 7.41 per cent in September. According to the data released on Monday, this fall in retail inflation is due to the softening of food prices. However, despite the fall, retail inflation is still above the RBI’s target band of between two and six per cent in October. Inflation has been above this band for every month of this year.

Explain that India’s central bank Reserve Bank of India mainly considers retail inflation inflation as the basis for formulating monetary policy. In such a situation, softening of prices is a positive sign for RBI. For some time now, RBI has been trying to stimulate the economy while fighting high inflation. The RBI has increased its key interest rate four times this year to 5.90 per cent – the highest since April 2019. This lower price is in line with RBI Governor Shaktikanta Das’s assessment on Saturday, who had predicted that retail inflation could come down to 7 per cent in October from 7.41 per cent in September.

Speaking at an event in New Delhi, the RBI Governor had said that inflation is an important concern for India. He had said that the central bank and the government have taken several steps in the past months to effectively deal with it. Despite the fall in inflation, the RBI has failed to manage price increases under the flexible inflation targeting framework (2-6%) implemented in 2016. CPI-based inflation has remained above the 2-6 per cent range for three consecutive quarters.

On November 3, RBI’s Monetary Policy Committee (MPC) held a meeting on its failure to control inflation for the first time since the monetary policy framework came into effect nearly six years ago. The report to be given to the government was discussed in this meeting. Under RBI’s rules, the central bank has to respond if it fails to keep inflation under control. At the same time, according to Morgan Stanley, India’s retail inflation may fall within the target band of RBI by March 2023.

Let us inform that according to the data released by the government on Monday itself, the wholesale price inflation also came down to 8.39 percent in the month of October. It was 10.7 percent in September. Wholesale inflation in the country has fallen below the double-digit mark for the first time since March 2021. The wholesale inflation rate at that time was 7.89 percent. In such a situation, after 19 months, the figure of wholesale inflation has come in single digits.

Expansion

Retail inflation eased to a three-month low of 6.77 per cent in October. This is lower than the five-month high of 7.41 per cent in September. According to the data released on Monday, this fall in retail inflation is due to the softening of food prices. However, despite the fall, retail inflation is still above the RBI’s target band of between two and six per cent in October. Inflation has been above this band for every month of this year.





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