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October retail inflation seen breaching RBI's 6% upper limit
Rising food prices and a base effect from last year's GST rate cuts could push inflation past the central bank's tolerance band, affecting monetary policy decisions.
What happened
A Business Standard poll of 11 economists suggests India's retail inflation, based on the consumer price index, likely breached the Reserve Bank of India's 6 per cent upper tolerance limit in October. business-standard.com Retail inflation is expected to rise to 6.05 per cent in October, which would be the first breach of the upper limit since October 2024. business-standard.com The economists attribute the rise to hardening food prices and an unfavourable base effect from the rate rationalisation in goods and services tax last year. business-standard.com
Around it
The breach raises the prospect of a second rate increase by the central bank within two months. business-standard.com In October, the Reserve Bank of India raised its repo rate to 5.50 per cent and shifted to a calibrated tightening stance. SCC Times
Sources
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