New Delhi: With the continued moderation in food prices, India's retail inflation for August eased to 5.30 per cent, staying within Reserve Bank of India (RBI)'s target range for second month in a row. It was 5.59 per cent in July but had stood at a high 6.69 per cent in August 2020, the government data showed on Monday.
The easing of inflation will give the Monetary Policy Committee more room to retain its accommodative stance in the October meeting to support the country's economic recovery. One of the six-members of the MPC had disagreed with continuing the easing bias at the last meeting.
"It has come as a relief," said Vivek Kumar, an economist at QuantEco Research. "From a policy perspective, last two months inflation print vindicates MPC's accommodative monetary policy stance."
The RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on either side. Last month, the central bank held its monetary policy loose, but cited concerns about inflationary pressures on the economy.
Despite the damage caused by the Covid-second wave, the economy grew at its fastest rate in the June quarter, backed by a low base of a record contraction, and a strong rebound in manufacturing.