Retail inflation hit a five-month high of 7.41 percent in September, mostly because food prices went up. It is reason enough for the Reserve Bank to keep raising rates as it has been doing since May 2022. In September, the food basket inflation rate went up to 8.60 percent from 7.62 percent in August.
Retail inflation has been above the Reserve Bank of India's upper tolerance level of 6 percent for the ninth month in a row.
Consumer Price Index (CPI) data released by the National Statistical Office (NSO) on Wednesday showed that retail inflation was 7.41 percent in September, up from 7 percent in August. In the same month a year ago, it was at a comfortable 4.35 percent. The central government has given RBI the job of making sure that retail inflation stays between 2 percent and 6 percent.
This year, food basket inflation went up from 7.62 percent in August to 8.60 percent in September. As long as inflation stays above 6 percent, RBI will have to give a report to the central government explaining why it hasn't been able to keep inflation between 4 percent and 6 percent, with a 2 percent spread on either side.
The central government has mandated RBI to ensure that retail inflation stays between 2 percent and 6 percent. In September, the Governor of the Reserve Bank of India (RBI), Shaktikanta Das, said that the sharp pressures on imported prices that were felt at the beginning of this fiscal year have eased, but prices for food and energy are still high.
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