Breaching the target: On India’s retail inflation
India's retail inflation rose to 4.38% in June, surpassing the Reserve Bank of India's (RBI) target for the first time under the new Consumer Price Index series. This increase from 3.93% in May and 2.7% a year earlier indicates a broader transmission of price pressures, primarily due to rising transport and fuel costs linked to the U.S.-Iran conflict. As a result, the RBI faces limited room for interest rate cuts amid these inflationary pressures.