Retail inflation surged to its 4 month high touching 2.57% in February

Inflation

India’s retail inflation surged to 2.57% in February touching a 4 month high but still the retail inflation remained under the RBI‘s tolerance limits, while the factory output weakened more in January, a fall which might prompt Reserve Bank’s Monetary Policy Committee (MPC) to change policy in its bi-monthly meeting scheduled to meet on 5th April.

As per the data released by statistics office, retail inflation hiked to 2.57% in February from 2.05% a month ago, on the other hand factory output decreased to 1.7% in January from 2.4% in the previous month.

According to a poll by Reuters, most of the economists had predicted consumer price index(CPI) at 2.43% for the last month.

The food inflation based on CPI, however was in negative at 0.66%. The latest price is higher than (-) 2.24% in January.

Earlier, in its bi-monthly Monetary policy meeting in February RBI decided to cut the leading lending rate that is repo rate by 25 basis points pegging the repo rate at 6.25% owing to benign inflation and also changed monetary policy stance to neutral.

“The decisions of the MPC in this regard will be data driven and in consonance with the primary objective of monetary policy to maintain price stability while keeping in mind the objective of growth,” RBI governor, Shaktikanta Das said after the MPC meeting regarding the decision taken.

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