Retail inflation down to 7.04% in May but still above RBI’s target band | Business News,The Indian Express

The CPI-based inflation has breached the upper limit of RBI’s tolerance band, ranging from 2-6 per cent, for the fifth consecutive month.

India’s retail inflation has eased slightly to 7.04 per cent on an annual basis in May, down from an eight-year high in April, government data showed on Monday.

The CPI-based inflation has breached the upper limit of RBI’s tolerance band, ranging from 2-6 per cent, for the fifth consecutive month. In April, the consumer price-based inflation (CPI) rate stood at 7.79 per cent. The previous high was recorded at 8.33 per cent in May 2014. April’s print was higher than 6.95 per cent in March and 4.23 per cent a year ago.

The RBI considers the retail inflation figure while arriving at its bi-monthly policy decision. The government has mandated the central bank to keep retail inflation at 4 per cent, with a tolerance level of plus or minus 2 per cent of that rate. As the inflation outlook was elevated, the RBI was forced to hike its key rate for the first time in four years, lifting it by 40 basis points (bps) in an off-cycle meeting in May and a follow-up 50 basis points increase last week, taking the repo rate to 4.90 per cent.

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https://indianexpress.com/article/business/retail-inflation-may-rbi-7967587/

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