Retail Inflation Rises To 6.52% In January After Falling For 2 Months

Retail inflation rose to 6.52% in January after falling for 2 months

Retail inflation exceeded the RBI’s upper target limit of 6% for the first time in three months.

New Delhi:

India’s annual retail inflation rate rose to 6.52% in January from 5.72% in December, government data showed today.

CPI (Consumer Price Index) inflation is above the Reserve Bank of India’s target limit of 6% for the first time in three months.

The previous high was 6.77% in October.

Rising food prices were one of the main reasons behind the rise in retail inflation – food inflation rose to 5.94% in January from 4.19% in December. Food price inflation accounting for nearly 40% of the basket of consumer price index.

The price of cereals increased 16.12% year-on-year, eggs increased 8.78% and milk increased 8.79%. Vegetable prices fell 11.7%.

Last week, the RBI (Reserve Bank of India) raised the repo rate by 25 basis points, noting that core inflation remained high.

The Reserve Bank has been mandated by the government to ensure retail inflation remains at 4%, with a 2% margin for both sides.

Retail inflation rates in rural and urban India are 6.85% and 6.00%, respectively. Higher prices of cereals, eggs and spices contributed to a spike in food inflation in January.

Retail inflation fell back to the RBI threshold in November 2022.

Last week, the RBI raised its repo rate for the sixth time since May to 6.50% and left the door open for further tightening to tame inflation.


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