Inflation rises for third straight month in October to 5%

Rising prices for some food and firm demand during the festival season pushed up India's retail inflation in October for the third straight month to 5 percent, making it less likely the central bank will cut interest rates at its policy review next month.

Zee Media Bureau

New Delhi: Rising prices for some food and firm demand during the festival season pushed up India's retail inflation in October for the third straight month, making it less likely the central bank will cut interest rates at its policy review next month.

The CPI inflation  rose 5 percent in October compared to 4.41 percent in September.

Apart from a surge in prices of items like lentils, higher demand for consumer durables and food items during the festival season beginning in October also contributed to inflation.

Analysts said inflation may moderate once festival demand softens and prices of lentils and vegetables fall as imports increase.

Raghuram Rajan the governor of the Reserve Bank of India, has said the central bank expected to meet its 6 percent retail inflation target for January and will focus on its 5 percent target for March 2017.

He cut the benchmark policy rate by a half percentage point to 6.75 percent in September, after months of pleading by government leaders and industrial groups.

Analysts said that the central bank may leave rates unchanged in its policy review meeting in early December and might wait for the US Fed decision on interest rates.