RBI Reports Vegetable Prices Dropping, Inflation Eases in India
The Reserve Bank of India (RBI) noted in its September bulletin that vegetable price shocks are reversing, which may help reduce food inflation in the first quarter of 2024-25. India’s retail inflation remained below RBI’s 4% target for the second consecutive month in August, with a rate of 3.65%. This is the second lowest in five years. Despite recent improvements, food price volatility remains a risk. The RBI has kept the repo rate unchanged for the ninth time, having raised it by 250 basis points since May 2022 to combat inflation.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it controls the money supply and interest rates in the country.
Inflation -: Inflation is when the prices of goods and services go up over time. It means you need more money to buy the same things.
Food inflation -: Food inflation is when the prices of food items like vegetables, fruits, and grains go up.
Retail inflation -: Retail inflation is the increase in the price of goods and services that people buy for their daily needs.
Repo rate -: Repo rate is the interest rate at which the RBI lends money to other banks. If the repo rate is high, borrowing money becomes expensive.
Basis points -: Basis points are a way to measure changes in interest rates. One basis point is equal to 0.01%.
Volatility -: Volatility means how much and how quickly prices can change. High volatility means prices can go up and down a lot in a short time.
