For the first time in three months, retail inflation was above the RBI’s upper target limit of 6%.
New Delhi:
The annual retail inflation rate in India rose to 6.52 per cent in January from 5.72 per cent in December, government data showed today.
CPI (consumer price index) inflation was above the Reserve Bank of India’s target range of 6 per cent for the first time in three months.
The previous high was 6.77 per cent in October.
The rise in food prices is one of the major reasons behind the rise in retail inflation – food inflation rose to 5.94% in January from 4.19% in December. The consumer price index basket accounts for about 40% of food price inflation.
On a year-on-year basis, prices of cereals rose by 16.12 per cent, eggs by 8.78 per cent and milk by 8.79 per cent. Vegetable prices fell by 11.7 per cent.
Last week, the Reserve Bank of India (RBI) hiked the repo rate by 25 basis points, noting that core inflation remained high.
The Reserve Bank is mandated by the government to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
The retail inflation rates for rural and urban India were 6.85 percent and 6.00 percent, respectively. Elevated prices of cereals, eggs and spices contributed to a rise in food inflation in January.
In November 2022, retail inflation again hit the RBI’s threshold.
Last week, the RBI raised the repo rate for the sixth time since May to 6.50 per cent, leaving the door open for further tightening to contain inflation.