India's retail inflation touched a six-month high in April to 2.92 per cent on high food prices, compared with 2.86 per cent in March. As per the Ministry of Statistics and Program Implementations, despite slight increase in inflation, consumer price index remains below the target of 4 (+/-2) per cent. Experts suggest there's still quite a chance that the Monetary Policy Committee would further cut key rates to ease pressure. Retail inflation remains well within the RBI's comfort level of 4 per cent for about eight months now, which has come down from 4.17 per cent in July 2018. Retail inflation was 3.31 per cent in October 2018, while it was the highest in June 2018 at 5 per cent.
The consumer price index (CPI)-based retail inflation was at 2.57 per cent in February this year. On yearly basis, it was 4.28 per cent in March 2018. Analysts polled by Reuters had forecast April's annual increase in the consumer price index at 2.97 per cent, said the agency.
The Reserve Bank of India has cut the retail inflation forecast to 2.9-3 per cent for the first half of the current fiscal, mainly due to lower food and fuel prices as well as expectation of a normal rainy season. For the rest half of 2019-20, it has forecast the retail inflation in the range of 3.5-3.8 per cent. Retail inflation is the key input for the RBI to decide on its key bi-monthly policy decision. The RBI reduced the key policy rate by 25 basis points to 6 per cent in its first monetary policy outcome earlier this month. Overall, the policy rate has been slashed by 50 basis points in 2019.