The latest inflation data is the lowest since April 2021. The consumer price is placed well within RBI's trajectory.
Further, India's consumer food price index (CFPI) declined to 0.68% in September 2021 vs. 3.11% in August 2021 and 10.68% in September last year.
In terms of segment-wise performance, in September 2021, the inflation rate of Food and beverages came at 1.61%, while the inflation rate of Pan, tobacco and intoxicants stood at 4.23%.
Also, the inflation rate of Clothing and footwear stood 7.16% in the month under review, while housing inflation comes at 3.58%. The inflation for fuel and light was at 13.63%.
Earlier this month, RBI presented its fourth bi-monthly monetary policy for FY22, where the repo rate was once again kept unchanged at 4% along with an accommodative stance. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent while supporting growth.
In the policy, the RBI projected CPI Inflation at 5.3 per cent for 2021-22; 5.1 per cent in Q2, 4.5 per cent in Q3; 5.8 per cent in Q4 of 2021-22, with risks broadly balanced. CPI inflation for Q1:2022-23 is projected at 5.2 per cent.
The RBI has said that "Going forward, the inflation trajectory is set to edge down during Q3:2021-22, drawing comfort from the recent catch-up in Kharif sowing and likely record production."