As per IMF, Indias retail inflation relaxed in September 2021, reducing to a five-month low. This was because of favourable comparison with year 2020 and moderating food prices that offset an increase in the cost of crude oil & fuel.
Consumer price inflation decreased sharply to 4.35% in September 2021 as compared to 5.3% in August. This was the third consecutive month within the tolerance band of Reserve Bank of India (RBI).
In September 2020, Consumer Price Index-based (CPI) inflation was 7.27%.
According to NSO Data, inflation in food basket relaxed to 0.68% in September 2021, significantly decreased by 3.11% as compared to August.
Government has tasked the Reserve Bank of India (RBI) to keep CPI-based inflation at 4%, with a tolerance band of 2% on both the sided. RBI usually factors in CPI-based inflation while launching its bi-monthly monetary policy.