E-Paper
Retail inflation eases to 13-month low of 4.31% in September
Food inflation stood at 3.88% last month, much slower than 5.91% recorded in August. Going forward, food inflation is expected to cool down due to expected normal monsoon rains.
Consumer price index-based or retail inflation eased to 4.31% in September, its lowest level in 13 months, helped by smaller rises in food prices, government data showed on Thursday. It was 5.05% in August.
Food inflation stood at 3.88% last month, much slower than 5.91% recorded in August. Going forward, food inflation is expected to cool down due to expected normal monsoon rains.
The Reserve Bank of India (RBI) tracks retail inflation for deciding interest rates.
“The decline in CPI is more than expected, probably because of a steep sequential fall in the prices of various types of pulses, vegetables and fruits. A favourable statistical base has also helped to a great extent in keeping the headline CPI print benign,” said Rupa Rege Nitsure, group chief economist, L&T Finance Holdings. “Until February we are going to see benign prints in CPI, which will open up space for at least one more rate cut in 2016-17 under the present regime.”
In its policy review last week, the first under governor Urjit Patel, the RBI had cut the repo rate — the rate at which the central bank lends to banks — by 25 basis points to 6.25%. Patel also said that the inflation target was 4% (plus/minus 2%) over five years.
