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Retail inflation crosses RBI target limit in October
Reported by Ishita Mukherjee (Staff Writer) · Eenadu ·
Confirmed by a second source: News18 Telugu
Photo: Wikimedia CommonsRetail inflation hit 6.09 percent in October, crossing the upper limit set by the central bank for the first time in two years. This rise was driven by higher costs for food and drinks, restaurant services, and travel expenses. Retail inflation based on the Consumer Price Index was 5.54 percent in September. The Reserve Bank of India aims to keep inflation within a range of two to six percent. SBI Research expects the RBI to raise key rates by 0.25 percent during its monetary policy review scheduled from December 2 to 4, according to data from the Ministry of Statistics and Programme Implementation.
Context
When retail inflation goes above the target limit, everyday items like food and travel become more expensive for ordinary people. Central banks often raise key interest rates to control rising prices in the economy.
ExplainerWhy this matters
What Happened
Retail inflation rose to 6.09 percent in October, going past the upper limit of the central bank's target range for the first time in two years due to higher food, drink, and travel costs.
Why It Matters
When inflation crosses target limits, the cost of living increases for everyday consumers as essential goods and services become dearer. It also prompts the central bank to consider raising interest rates, which can make loans and borrowing more expensive.
What Happens Next
The Reserve Bank of India will hold its monetary policy review from December 2 to 4, where experts expect a possible rate hike of 0.25 percent to help bring inflation back under control.
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