India’s retail inflation accelerated to five per cent in June against 4.87 per cent in May. This is the highest increase in the last five months. However, this is well below the upper tolerance level of six per cent stipulated by the Finance Ministry in consultation with the Reserve Bank of India. The acceleration is driven by the depreciating value of rupee and surging oil prices. Food inflation accelerated by 2.91 per cent in June, compared to 3.1 per cent in May. Fuel price inflation has soared to 7.14 per cent compared to 5.8 per cent in May.
Recently, the Monetary Policy Committee had increased the repo rate by 25 basis points, expecting higher inflation due to soaring oil prices. The government had recently approved higher Minimum Support Prices for Kharif crops, which is expected to push up inflation in the coming months.

India’s retail inflation accelerated to five per cent in June against 4.87 per cent in May. This is the highest increase in the last five months. However, this is well below the upper tolerance level of six per cent stipulated by the Finance Ministry in consultation with the Reserve Bank of India. The acceleration is driven by the depreciating value of rupee and surging oil prices. Food inflation accelerated by 2.91 per cent in June, compared to 3.1 per cent in May. Fuel price inflation has soared to 7.14 per cent compared to 5.8 per cent in May.
Recently, the Monetary Policy Committee had increased the repo rate by 25 basis points, expecting higher inflation due to soaring oil prices. The government had recently approved higher Minimum Support Prices for Kharif crops, which is expected to push up inflation in the coming months.