Business

How It Compares With RBI Inflation Target

Consumer inflation stood at 3.77 per cent in September, as against 3.69 per cent in the previous month, the government said on Friday. The retail inflation figure was lower than economists’ estimates. Retail inflation was expected at 4 per cent last month, according to a median of estimates by 45 economists in a poll by news agency Reuters held between October 3 and 9. Friday’s data showed retail inflation – determined by the Consumer Price Index (CPI) – was within the Reserve Bank of India’s (RBI) medium-term target of 4 per cent.

Food inflation quickened to 0.51 per cent, as against 0.29 per cent in August. Food prices make up nearly half of the Consumer Price Index.

The Reserve Bank of India (RBI) primarily tracks consumer inflation data while formulating the monetary policy. The central bank had last week maintained a status quo on key lending rates, surprising many market watchers who had anticipated a third consecutive hike, but ruled out any reduction going forward.

Consumer inflation had stood at a 10-month low of 3.69 per cent in August. That was the first in 10 months in which retail inflation came below the RBI’s medium-term target, triggering hopes of a rate hike in the October policy.

The central bank is due to conduct its next policy review in December.

Separate data on Friday showed factory activity growth – determined by the Index of Industrial Production (IIP) – stood at 4.3 per cent in August, slowing down from 6.6 per cent in the previous month.



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