Retail inflation zooms to 4.88% in November on high food prices

Mainly pushed by high food prices during the month, the CPI-based inflation breached the RBI's medium-term target of 4%

The country’s retail inflation rate, as measured by the Consumer Price Index (CPI), stood at 4.88% in November, against October’s 3.58 per cent, showed official data released on Tuesday. This was higher than the Reserve Bank of India’s (RBI’s) 4.0 per cent medium-term target, especially because of soaring food prices amid unseasonably heavy rains.
 
The rate of retail food inflation during November stood at 4.42% on a year-on-year basis, against 1.90 per cent the previous month.
 
The numbers are in line with a poll conducted by Reuters among more than 30 economists. The poll had predicted the November retail inflation to hit a 13-month high of 4.20 per cent.
 
The higher inflation rate is unlikely to push the RBI to change the repo rate, or the rate at which the central bank lend money to commercial banks, anytime soon, according to economists polled by Reuters.
 
November's heavy rains "created lots of damage" for perishable fruit and vegetable crops, Larsen & Toubro group chief economist Rupa Rege Nitsure had said. "We have seen that translated into price rises for onions, tomatoes and other perishable commodities".