- Consumer inflation soars to highest level recorded since July 2016
- High food inflation due to surge in vegetable prices fuels CPI
- RBI tracks retail inflation primarily for formulating monetary policy
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Fifty two economists had expected consumer inflation - or the rate of increase in consumer prices - 5.26 per cent last month, according to poll by news agency Reuters between December 5 and 10.
Retail food prices, which make up nearly half of the inflation basket, increased 10.01 per cent in November from a year earlier, as against 7.89 per cent in October.
The central bank has so far this year reduced the repo rate by 135 points to a nine-year low of 5.15 per cent to curb inflation and spur growth.
In its fifth bi-monthly policy review of fiscal year 2019-20, the RBI cited concern about near-term inflation. It said inflation is expected to rise in the near term but moderate below its goal of 4 per cent by the second quarter of next fiscal year.
The central bank raised its CPI projections to 5.1-4.7 per cent in the second half of 2019-20 and 4.0-3.8 per cent in the first half of next financial year citing "broadly balanced" risks.
With economic growth at its weakest in over six years, 49 per cent of economists, 33 of 67, in a snap poll taken by Reuters after the Monetary Policy Committee's decision, predicted that this would be a temporary pause and another cut would come in February. The remaining economists expected no move at the February 4-6 meeting.
A firm majority, over 80 per cent economists said the RBI will cut rates by end-June, with the median forecast for a 25-basis point trim to 4.90 per cent, and then remaining on the sidelines till the end of the year.
The RBI currently has an "accommodative" policy stance, which eradicates the possibility of going back to a rate hike suddenly. The RBI made the switch from a "neutral" stance in June this year, which allows it to either tighten or loosen monetary policy at any time.
Separate official data showed industrial production or factory output - determined by the Index of Industrial Production (IIP) - shrank 3.8 per cent in October as against 4.3 per cent in the previous month.