Retail trade inflation declined to a three-month low of 6.77% in October from a five-month high of 7.41% in September, due to weaker food price increases and from a solid year-over-year base, according to government data on Monday.
Data released by the National Bureau of Statistics showed that inflation based on consumer prices, or retail inflation, has held stubbornly above the upper range of the 2-6% target. the Reserve Bank of India for each month of this year.
India’s central bank looks at retail price inflation primarily to frame monetary policy, and any easing of price pressures is a positive sign for the RBI as it battles high inflation and tries to stimulate the economy. simultaneously.
The RBI has raised its key rate four times this year to 5.90%, the highest since April 2019.
The drop in price pressures is in line with RBI Governor Shaktikanta Das’ assessment on Saturday that retail inflation could fall below 7% in October from 7.41% in September.
According to Das, who spoke at the HT Leadership Summit in New Delhi, inflation is a major concern for India. He added that the central bank and the government had indeed taken several measures to address this over the past few months.
Yet the RBI failed to manage price hikes under the flexible inflation targeting introduced in 2016 as CPI-based inflation remained above the 2-6 range. % for three consecutive quarters.
On November 3, the RBI’s Monetary Policy Committee (MPC) met for the first time since the monetary policy framework came into effect some six years ago, an out-of-sequence meeting to discuss and produce the report that would be submitted to the government. for failing to meet the inflation mandate.
The public has not yet had access to more information about the conference.
According to a separate report, Morgan Stanley expects retail price inflation in India to be within the RBI’s target range by March 2023.
A further breakdown of the latest data showed rural inflation outpacing urban price pressures for the fifth consecutive month.
Earlier in the day data showed a decline for the fifth consecutive month, inflation based on wholesale prices fell to 8.39% in October from a year ago, its lowest since March 2021 and below a double-digit increase for the first time in 18 months.