New Delhi: Cheaper food items helped retail inflation drop to a fresh low of 4.38 per cent in November — the fifth consecutive month of decline — a development that can strengthen the case for interest rate cut by the RBI.
This is the lowest level of Consumer Price Index (CPI) based inflation since the government started computing the new series of data in January 2012. It stood at 5.52 per cent in October 2014, while same was over double the current level at 11.16 per cent in November 2013.
The food inflation also came down to 3.14 per cent in November as against 5.59 per cent in the previous month.
Retail prices of vegetables declined by 10.9 per cent as against a decline of 1.45 per cent in October, according to the data released by the Ministry of Statistics and Programme Implementation today.
Price rise in fruits slowed to 13.74 per cent from 17.49 per cent in October.
However, the rate of inflation in protein-rich items like eggs, fish and meat was at 6.48 per cent in November, slightly higher from 6.34 per cent in the previous month.
The Reserve Bank in the recent past has focussed on retail inflation while deciding its monetary policy, but there have been no rate cut for many months.
RBI has been targeting a retail inflation of 8 per cent by March 2015 and 6 per cent by January 2016.
In its monetary policy review earlier this month, the Reserve Bank kept its key repo rate unchanged at 8 per cent and cash reserve ratio (CRR) at 4 per cent.
“…if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle,” RBI Governor Raghuram Rajan had said.