India's annual CPI rose to 5.54% in September, the highest since late 2024 and
approaching the Reserve Bank of India's 2–6% tolerance band, the Ministry of
Statistics and Programme Implementation said on Monday. The print exceeded
August's revised 4.83% and was in line with economists' survey median of 5.58%.
The reading reinforces the RBI's decision last week to raise rates for the first
time in nearly four years. Indian government bonds sold off after the release:
the benchmark 10-year yield rose about 10 bps to 7.40%. Food was the main
driver, with food inflation jumping to 7.74% in September from 5.97% in August;
food accounts for over one-third of the CPI basket and below-normal rainfall is
expected to add further price pressure in coming months.
