Retail inflation decreased somewhat in June to 7.01 percent, primarily due to a minor decline in food costs, although it was still beyond the Reserve Bank's comfort zone. Inflation measured by the consumer price index (CPI) was 7.04 percent in May and 6.26 percent in June 2021.
According to data from the National Statistical Office (NSO), the food basket experienced inflation in June 2022 of 7.75 percent compared to 7.97 percent the month before. The RBI has been instructed to maintain inflation at 4 percent with a 2 percent tolerance on either side. Since January 2022, the retail inflation rate has above the RBI's 6 percent tolerance level.
Retail inflation has so far this year remained above the RBI's upper tolerance level of 6 percent due to rising global commodity costs. A worsening rupee situation has made things worse. Because oil is India's major import, increasing oil prices have already caused the rupee to decline by more than 6 percent for the year. Today's low for the rupee in relation to the US dollar was 79.66.
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