Retail inflation hits an eight-year high of 7.79 % in April this year. It is driven by increasing food and fuel prices. Further, it may provoke the Reserve Bank to go in for another interest rate hike in the coming month’s policy reviews to tame the price rise.
Concerned about rising inflation, the RBI unexpectedly raised the repo rate by 40 basis points to 4.40 percent last week. Inflation has remained above the RBI’s 6% target for four months in a row, owing primarily to the Russia-Ukraine conflict, which has impacted commodity prices around the world.
The previous high in consumer price index (CPI) based retail inflation was registered at 8.33 % in May 2014. CPI inflation was 6.95 % in March of this year and 4.23 % last year in April 2021.