Retail inflation eases to 6.71% in July as against 7.01% in June – Times of India

NEW DELHI: India’s retail inflation based on consumer price index (CPI) eased to 6.71% in July, data released by the government showed on Friday.
The inflation numbers in July is significantly lower than the 8-year high of 7.79% touched in April.
This is the 2nd straight month when inflation figures have cooled. In May, the CPI number came in at 7.01%.
However, inflation continues to remain above Reserve Bank of India’s (RBI) upper tolerance level of 6%. It has remained above this mark for the past 7 months now.

The RBI mainly factors in retail inflation while arriving at it bi-monthly policy.
Reserve Bank’s monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4% (+,-2%).
The moderation in inflation figures is mainly on account of softening in food prices, government data showed.
Earlier this month, RBI raised interest rates by 50 basis points to 5.40%, taking it above where it was before the pandemic, with more rate rises expected to come.
RBI governor Shaktikanta Das has warned that persistently elevated cost of living conditions could translate into higher wages and inflation, which is unlikely to fall within the top end of the mandated target band until December.
Stating that there are signs that headline inflation, which has breached the 6% upper threshold set for the RBI for six consecutive months, has peaked, Das had said that policy moves from here on will be “calibrated, measured and nimble” and will depend on unfolding dynamics.
“… inflation still remains at uncomfortably or unacceptably high levels and therefore, monetary policy has to act,” he had told reporters.