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Retail Inflation Data: There is news of relief on the inflation front. In the month of November, the retail inflation rate has come down to 5.88 percent while in October 2022, the retail inflation rate was 6.77 percent. A year ago in November 2021, the retail inflation rate was 4.91 percent. There has been a drastic reduction in the inflation rate of food items. The food inflation rate has come down to 4.67 percent in the month of November, while the food inflation rate was 7.01 percent in October. At the same time, there has been a decrease in food inflation in both urban as well as rural areas in the month of November.
Sharp drop in food inflation
The major reason for the fall in retail inflation is the fall in the inflation rate of food articles. The food inflation rate was 7.01 percent in October 2022, which has come down to 4.67 percent in November. On the other hand, the retail inflation rate in urban areas was 6.53 per cent in October, which has come down to 3.69 per cent in November. While the retail inflation rate in rural areas was 7.30 per cent in October, which has come down to 5.22 per cent in November.
Retail inflation within the tolerance band of RBI
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The biggest relief is that the retail inflation rate has come down below the upper level of RBI’s tolerance band of 6 percent. RBI has fixed a tolerance band of 2 to 6 percent inflation rate. But the retail inflation rate was consistently above the RBI’s tolerance band. In April, the retail inflation rate reached 7.79 percent, after which, after five monetary policy meetings, the RBI increased the repo rate to control inflation. The repo rate has increased from 4 percent to 6.25 percent.
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