CPI inflation slumps to 11-month low of 5.88% in November

Subsequent to succumbing to the second month straight, retail inflation has now fallen beneath the 6% upper bound of RBI's resilience band without precedent for 2022.

India's headline retail inflation rate slumped to an 11-month low of 5.88 percent in November from 6.77 percent in the previous month, data released on December 12 by the ministry of statistics and programme implementation showed.

At 5.88 percent, the latest Consumer Price Index (CPI) inflation print is well below the consensus estimate. As per a Moneycontrol poll, inflation was seen falling to 6.4 percent.

The fall in inflation in November follows a similar drop in October, allowing it to fall below the 6 percent upper bound of the Reserve Bank of India's (RBI) 2-6 percent tolerance band for the first time in 2022.

As for the medium-term target of 4 percent, CPI inflation has exceeded it for 38 months in a row.

The sharp fall in inflation will come as a huge relief to the RBI, which has been on a rate-hiking spree since May.

Last week, the national bank's rate-setting board expanded the strategy repo rate by 35 premise focuses to 6.25 percent, taking the absolute quantum of rate climbs to 225 premise focuses starting from the beginning of May.

One premise point is equivalent to 100th 100th of a rate point.

In the mean time, CPI expansion has now fallen by 153 premise focuses in the wake of hitting 7.41 percent in September.