NEW DELHI: Retail inflation based on consumer price index (CPI) rose to 7.61 per cent in the month of October as against 7.27 per cent in September mainly on account of rising food prices.
Inflation figures for the month of September was revised downwards from 7.34 per cent to 7.27 per cent.
Disruption from by the coronavirus pandemic and excessive rainfall in states such as Maharashtra, Karnataka and Andhra Pradesh have damaged and delayed the harvesting of onions – a key ingredient in Indian kitchens – alongside other vegetables.
Supply distortions have led to a surge in vegetable prices, thereby lowering the chances of further interest rate cuts by the Reserve Bank of India (RBI).
Inflation figures in October have remained above 7 per cent for the second straight month and above the RBI’s comfort leverl for the seventh consecutive time. RBI’s monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on CPI at 4 per cent (+,-2 per cent).
The RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.
The central bank has eased its key repo rate by 115 basis points (bps) since March, and is widely expected to wait until February before cutting the rate again amid worries over higher inflation.
In its previous monetary policy meet held in October, the RBI decided to keep policy repo rate unchanged at 4 per cent. RBI governor Shaktikanta Das had said that retail inflation is expected to remain close to the targeted level by the last quarter of the current year.
(With agency inputs)