What is your take on the retail inflation number announced for November 2021?

Retail inflation or CPI inflation for November touched a 3-month high of 4.91% and this was largely attributable to the spike in food prices. While the CPI inflation remains within the upper limit of 6% prescribed by the RBI for inflation; it is still well above the median rate of 4% which is the ideal situation suggested by the RBI. November inflation is 43 bps higher compared to Oct-21 and could have been higher, had it not been for the base effect.

Fuel and transport inflation remained high despite the Centre and state reducing excise and VAT on petrol and diesel. However, the fuel costs were lower on a sequential basis. The trigger was the spike in food inflation in November. CPI inflation for Nov-21 at 4.91% was lower than 5.10% projected in the Reuters poll. However, this is likely to induce the RBI to shift its stance towards inflation than growth in coming monetary policies.