India’s retail inflation eased to a four-month low of 4.87% in October from 5.02% in September, government data released on Thursday showed.
The price rise indicator was 6.83% in August and 7.44% in July. The Reserve Bank of India is tasked with keeping inflation at 4%, with a tolerance band between 2% and 6%.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose slightly to 6.61% as compared to 6.56% in September. Inflation in vegetables dropped to 2.70% in October from 3.39% in September.
The price rise in spices continued to remain high at 22.76% in September.
On October 6, the Reserve Bank of India kept the repo rate unchanged at 6.50% for the fourth consecutive time. The repo rate is the interest rate at which the central bank lends money to commercial banks.
Central banks typically increase key lending rates at times of high inflation in economies. Higher key lending rates translate into high interest on loans disbursed by commercial banks. This, in turn, keeps a check on discretionary spending by consumers.
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