NEW DELHI – India’s retail inflation in October fell to a four-month low of 4.87%, according to the latest data released by the government. This marks a decrease from September’s 5.02% and is significantly lower than the highs of 6.83% and 7.44% seen in August and July, respectively. The Reserve Bank of India (RBI), which aims to keep inflation within a range of 2%-6%, has managed to steer the economy closer to its medium-term target.
The National Statistical Office (NSO) highlighted variations between rural and urban inflation rates, with rural areas seeing a slightly higher rate of 5.12% compared to urban areas at 4.62%. Despite the overall decline in inflation, the food basket experienced a marginal increase from September’s 6.56% to 6.61% in October. However, vegetable inflation saw a drop from 3.39% in September to 2.70%.
A notable price surge was observed in spices, with an increase of 22.76%. This specific rise contrasts with the general trend of easing inflation across other categories.
The RBI has maintained the repo rate, which is the rate at which it lends to commercial banks, at 6.50% for the fourth consecutive time as of October 6. This decision reflects the central bank’s efforts to balance controlling inflation with the need for economic growth. Steady central bank lending rates are essential as they influence loan interest rates from commercial banks, which can impact consumer spending and investment.
India’s easing inflation comes as a relief amid global economic challenges and suggests that measures taken by policymakers are having their intended effect. The RBI’s steady hand on monetary policy appears to be supporting an environment conducive to sustainable growth while keeping inflation pressures in check.
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