Retail inflation cooled to 5% in September

Months after elevating to its 15-months peak level, India’s retail inflation cooled down further in the month of September.

Its retail inflation, aka CPI, eased to a three-month low in September on the back of softer vegetable prices. Moreover, the inflation came below RBI’s upper tolerance band of 2%-6%.

India’s retail inflation for the month of September raised by 5.02 per cent, compared with its growth of 6.83% in August, according to the data released by the ministry of statistics on Thursday.

Industry experts predicted of a cooling in inflation in the month of September on the account of a sharp decline in select food items, including vegetable prices and edible oils.

Despite a positive reduction in inflation, CPI continued to remain above 4%, a target that the country’s central bank has signalled would be key before easing rates. One of the major contributors in the consumers price basket, food inflation, also lowered last month. Food inflation rose by 6.56% in September against 9.94% in August.

High vegetable prices was the key factor in fuelling inflation for the past two months. In the wake of rising inflation, government even imposed ban rice exports, and raising duties for onions.