Question
Retail inflation in India remained below the RBI’s
lower tolerance level primarily because it stayed under which percentage in December 2025?Solution
In December 2025, retail inflation stood at 1.33%, which is below the RBI’s lower tolerance threshold of 2% under its inflation targeting framework. RBI’s target is 4% with a tolerance band of ±2% (2%–6%), making 1.33% a comfortable level from a monetary policy perspective.
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