Retail inflation reaches 6.52% in January, highest in three months

Retail inflation in the country has increased to 6.52% in the month of January. This is the highest level of retail inflation in three months. It was at 5.72% in December 2022. Whereas in January last year, retail inflation was 6.01%. While three months ago in October 2022, the retail inflation was 6.77%.

Inflation has increased due to the increase in the prices of food items, especially pulses, rice, wheat and vegetables. Food inflation has gone up to 5.94% in January, which was 4.19% in December.

How does inflation affect?

Inflation is directly related to purchasing power. For example, if the inflation rate is 7%, then Rs 100 earned will be worth only Rs 93. That’s why investing should be done keeping in mind the inflation. Otherwise the value of your money will decrease.

How does inflation increase or decrease?

The rise and occurrence of inflation depends on the demand and supply of the product. If people have more money, they will buy more things. Buying more things will increase the demand for things and if there is no supply according to the demand, the price of these things will increase.

In this way the market becomes vulnerable to inflation. Simply put, excessive flow of money in the market or shortage of goods causes inflation. On the other hand, if the demand is less and the supply is more, then the inflation will be less.

How does RBI control inflation?

To reduce inflation, the flow of money (liquidity) in the market is reduced. For this, the Reserve Bank of India (RBI) increases the repo rate. Worried about rising inflation, RBI has recently increased the repo rate by 0.50%. Due to this the repo rate has increased from 4.90% to 5.40%.