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New Delhi: Retail inflation soared to an eight-year high of 7.79% in April on annual basis mainly due to stubbornly high food prices, remaining above the Reserve Bank of India’s (RBI) upper tolerance level for the fourth month in a row.
Inflation based on the Consumer Price Index (CPI) was 6.95% in March this year and 4.23% in April 2021.
Inflation in the food basket rose to 8.38% in April from 7.68% in the preceding month and 1.96% in the year-ago month.
The RBI has been mandated by the government to ensure that inflation remains at 4% with a margin of 2% on either side.
The retail inflation has remained above 6% since January 2022.
After the off-cycle Monetary Policy Committee (MPC) meeting of RBI last week, RBI governor Shaktikanta Das had said the adverse effects of the unprecedented high global food prices due to the ongoing geopolitical situation are reflecting in the domestic market as well, and going forward inflationary pressures are likely to continue.
Meanwhile, sources said the central bank is likely to raise inflation projections in the MPC meeting next month and would also consider a rate hike to tame inflation which is above its comfort level.
Earlier this month, the MPC raised the key policy rate (repo) by 40 basis points with an aim to tame the rising inflation. It was the first rate hike after August 2018.