Retail inflation eases to 5.72% in December from 5.88% in November: Government data

New Delhi: India's retail inflation during the month of December was at 5.72 percent, according to data released by the ministry of statistics on Thursday. The latest figures showed a marginal decline and further moderation in retail inflation as compared with the previous month. India's retail inflation rate based on Consumer Price Index was 5.88 percent in November from 6.77 percent in October.

Retail inflation in India had remained above 6 percent till October for over three quarters, which was beyond RBI's comfort zone. RBI, in its fight against rising inflation, had already hiked the key policy rate by 225 basis points since May to 6.25 percent to cool off domestic retail inflation that stayed above its upper tolerance limit for nearly three quarters.

Raising interest rates typically cools demand in the economy, thereby putting a brake on inflation. The latest hike was on December 7 last year, when the Monetary Policy Committee (MPC) of the RBI increased the policy repo rate by 35 basis points, besides deciding to remain focused on the "withdrawal of accommodation" of monetary policy to ensure that inflation remains within the target going forward while supporting economic growth.