Declining prices of food items like vegetables pulled down retail inflation to 5.59 per cent in July, bringing it back within the RBI's comfort zone after two months, official data showed on Thursday.
The retail inflation based on the Consumer Price Index (CPI) had remained above 6 per cent during May and June.
The Government has mandated the RBI to maintain retail inflation at 4 per cent, with a margin of 2 per cent on either side.
The CPI based inflation stood at 6.26 per cent in June 2021 and 6.73 per cent in July 2020.
The overall food inflation softened to 3.96 per cent in July this year, from 5.15 per cent in the preceding month.
Vegetable prices decreased at a faster pace, with inflation dropping to (-) 7.75 per cent in July compared to (-) 0.7 per cent in the previous month, as per the data.
The rate of price rise in pulses and products was 9.04 per cent compared to 10.01 per cent in June 2021.