India's Retail Inflation Above RBI's Tolerance Level Yet Again

INFLATION - NEW DELHI. India's annual retail inflation in January rose above the central bank's upper threshold for the first time in three months, on higher food prices, which could keep policymakers' bias towards managing higher prices.

India's annual retail inflation rate rose to 6.52% in January from 5.72% in December, government data showed on Monday.

January's retail inflation was above the Reserve Bank of India's upper targeted limit of 6% for the first time since October and much higher than the 5.9% estimate, according to a Reuters poll of 44 analysts.

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Food price inflation, which accounts for nearly 40% of the consumer price index (CPI) basket, rose to 5.94% in January from 4.19% in December. The prices of cereals and milk continued to rise.

Last week, The Reserve Bank of India hiked its key repo rate by a quarter percentage point and surprised markets by leaving the door open to more tightening, saying core inflation remained high.