September retail price inflation inches up, stays below RBI's 4% target

Economists say oil prices, exchange rate may lead to rate hike in December review

Retail inflation rate measured by the consumer price index (CPI) rose to 3.77 per cent in September from 3.69 per cent in the previous month, remaining below the Reserve Bank of India’s (RBI’s) target of 4 per cent. 

Though the rate justifies the RBI’s status quo stance in the policy rate, at least from inflation point of view, economists believe that oil prices, exchange rate, and higher procurement prices would put pressure on the central bank to hike rates in its December review.  

The food inflation rate remained subdued at 1.08 per cent in September, though higher than 0.29 per cent in