India's retail inflation above RBI’s 6% target for second month
New Delhi, March 13: Retail inflation in India remained above the Reserve Bank of India's 6 percent upper tolerance band for the second consecutive month in February 2023, with the Consumer Price Index standing at 6.44 percent, according to government data released on Monday.
In rural and urban India, retail inflation was 6.72 percent and 6.1 percent, respectively. Cereals and products, as well as fruits, contributed to the increase in retail inflation in February. Furthermore, the Consumer Food Price Index in February was 5.95 percent, according to data.
Vegetable retail inflation, on the other hand, fell 11.61 percent.
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Notably, retail inflation in India in December was 5.72 percent, compared to 5.88 percent in November and 6.77 percent in October, according to the Consumer Price Index.
Retail inflation in India has been above the RBI's 6% target for three consecutive quarters, and it will only return to that level in November 2022.
The RBI is deemed to have failed in managing price rises under the flexible inflation targeting framework if CPI-based inflation falls outside the 2-6 percent range for three quarters in a row.
To combat inflation, the RBI has raised the short-term lending rate by 250 basis points since May of last year, including the most recent 25 basis point increase. Raising the repo rate helps to cool the economy's demand and thus manage inflation.
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- ANI
