Retail Inflation Eases To Historic Low Of 5.52% In October

The consumer price index (CPI)-based inflation came down to historic low of 5.52% in October against 6.46% in September. However, according to economists, the Reserve Bank of India (RBI) is likely to wait till January next year before taking decision on a rate cut.

As per data released by the Ministry of Statistics and Programme Implementation (MoSPI), CPI inflation dropped to 5.59% in October from 7.67% in September and 12.93% in October last year.

The clamour for a rate cut will increase further following this data. But economists have advised RBI to be cautious before taking a call. “The CPI numbers are encouraging, but we should take these with a pinch of salt. The kharif crop output has been forecast by the government to be much lower than last year, and food prices may rise again. We need to wait and watch. This is why the Reserve Bank is still cautious,” said Madan Sabnavis, chief economist at CARE Ratings.

RBI will announce its monetary review next month.