Retail inflation is now at its lowest level in over six years. According to government data, the Consumer Price Index (CPI) inflation for June came in at just 2.10%, down significantly from May. Food inflation, often the most unpredictable component, has actually turned negative — prices in both rural and urban India are falling.
Wholesale inflation, too, has dipped into negative territory, thanks to lower prices for food items, oil, metals, and fuel. All of this has allowed the RBI to take a more relaxed approach to rate changes, at least for now.