Consumer price inflation in India, as reflected in the consumer price index for June 2016 hit a 22-month high of 5.77 per cent as retail inflation accelerated for a third consecutive month, government data released today showed.
Consumer prices increased by 5.77 per cent in June against May's 5.76 per cent. Consumer price inflation was last higher than June's level in August 2014 when it was 7.73 per cent. Food price inflation rose 7.79 per cent during the month compared with 7.47 per cent in May, data showed.
It was the rising trend in consumer price inflation that prompted the Reserve Bank of India (RBI) to keep its benchmark interest rate unchanged in June. Consumer inflation is a key metric that the RBI tracks to decide interest rates.
The RBI has set a target for retail inflation at 5 per cent by March 2017. Although this has not been achieved so far, rates are still far below the 10 per cent levels when Raghuram Rajan took over as RBI governor three years ago.
Inflation trajectory in coming months will depend a lot on monsoon rain, which is critical for the farm economy.