India’s Consumer Price Index-based inflation came down to 3.17% in January, from 3.41% in December 2016. This is the lowest that retail inflation has been in the past five years, reported NDTV. The ease in inflation is because of the 15.62% fall in vegetable prices and a 6.62% drop in pulses prices. The inflation rate is also below Reserve Bank of India’s target of 5%.
December’s retail inflation rate was driven by a drop in the prices of perishable items. A Reuters poll had set the inflation rate at 3.22%.
The retail inflation rate has been below 4% since the Centre on November 8 announced its decision to demonetise Rs 500 and Rs 1,000 notes to “fight corruption, black money and counterfeiting”. The high denomination notes made up 86% of the country’s currency in circulation at the time.
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