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Retail Inflation Hits 3-Month High Of 6.52% In January, Breaches RBI's Tolerance Level After Two Months

Inflation had been on a declining trend for last two months on the back of softening food prices but food prices saw a major spike in January

India's retail inflation in January breached Reserve Bank of India's (RBI) upper end of the tolerance level of 6 per cent after remaining below that number for two months. Retail inflation as measured by the Consumer Price Index (CPI) quickened to 6.52 per cent in January compared with 5.72 per cent in December.

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Analysts in a Reuters poll had predicted annual inflation of 5.9 per cent in January.

Inflation had been on a declining trend for last two months on the back of softening food prices but food prices saw a major spike in January. Food inflation spiked to 5.94 per cent from 4.19 per cent in the previous month.

Reserve Bank of India's Monetary Policy Committee takes into account retail inflation numbers for setting interest rates. Earlier this month, RBI raised key lending rate by 25 basis points taking the repo rate to 6.5 per cent, highest since 2018.

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