India inflation jumps to 5.54% in Sept, strengthening case for further rate hikes
NEW DELHI: India’s retail inflation jumped to 5.54% in September, data showed on Monday, nearing the upper end of the central bank’s 2%-6% tolerance band and strengthening the case for further rate hikes as the Iran war and weak monsoon-led price pressures ripple through the economy. The September print was marginally higher than economists’ 5.4% forecast in a Reuters poll, marking the fourth…
India's retail inflation surged to 5.54% in September, data revealed on Monday, inching close to the Reserve Bank of India's (RBI) 6% ceiling. This inflates the probability of further rate hikes as geopolitical tensions, such as the Iran war, and weak monsoon conditions contribute to price pressures throughout the economy. The September figure was slightly higher than economists' 5.4% prediction in a Reuters survey, marking the fourth straight month of inflation surpassing the RBI's 4% medium-term objective and its peak in the current series.
Inflation in September was further inflated due to base effects, with last year's lower prices making this year's inflation appear greater. The RBI recently joined its global counterparts in raising the benchmark repo rate by 25 basis points to 5.5% for the first time in almost four years, citing evidence of high inflation expectations and spreading price pressure. This was the central bank's first rate increase since February 2023.
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