Inflation Rate Sticks Above RBI’s Tolerable Index for Two Months Straight!!

The Indian economy has maintained a great shape throughout the fiscal year. As per the inflation measured by the consumer price index (CPI), the inflation rate measured for February counts at 6.44%, above the RBI tolerable index of 6%.

Inflation Rate Report 

India’s inflation margin has swept down to 6.44% in February from 6.52% in January. Although the inflation rate has eased a bit this month is still above the RBI tolerable limit that is 6%.

According to the reports, India’s inflation cost has fluctuated during this fiscal year. It was a decent fiscal year for India as the inflation rates remained below RBI’s tolerable limit for 9 months. However, the inflation rates have stayed above RBI’s tolerable limit for the past two months.

The market forecasts expected the inflation rate in February to range around 6.35%, originally going to 6.44%. The RBI tolerable limit ranges between 2-5% and the inflation have remained above that for now.

RBI Inflation Rate: Increase in Prices 

The borrowing rates will hike after the increase in inflation. The Central banks will increase the repo rate which means the commercial banks will have to pay more interest rates. Now, this will lead to an increase in the interest rates on home loans, insurance, and, other monetary policies.

Here’s a list of changes in the daily life products:

Inflation Rate Hike: Cause

The hike in the inflation has hit globally as an after-effect of the Russia-Ukraine war and the lockdown imposed due to Covid-19. As a result, the production and export of products were significantly impacted and that resulted in a scarcity of items like household products, foods, fuel, etc. which also caused the increase in their prices. This phenomenon caused increase in inflation price.

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