NEW DELHI: India's retail inflation based on the Consumer Price Index (CPI) is expected to ease to 5.5 percent in November due to a decline in food prices, according to a Morgan Stanley report.

"We expect CPI inflation to edge downwards to 5.5 percent in November from 6.2 percent in October, aided by a moderation in food prices, even as core ticks up and fuel continues to decline. On a sequential basis, we anticipate the index to decline on the back of contracting food prices and a deceleration in core CPI," the report.

The core CPI includes goods and services but excludes food and fuel, the prices of which are considered more volatile.

CPI inflation rose to 6.21 percent in October as higher prices of food items such as vegetables spiked during the month. This was the first time inflation breached the RBI upper limit of 6 percent in recent months.

Retail inflation has increased from 5.49 percent recorded in September as the prices of vegetables surged by as much as 42.18 percent in October as the late withdrawal of the monsoon this year resulted in damage to crops and reduced supply in the market.

RBI Governor Shaktikanta Das said last week, “India's growth story is still intact. Inflation is on the declining path, but we cannot overlook the significant risks in the outlook. This risk cannot be underestimated.”

The RBI Governor was optimistic about the outlook for the economy, observing that “the balance between inflation and growth is well poised."

The Reserve Bank of India (RBI) on Friday slashed the cash reserve ratio (CRR) for banks by 0.5 percent to make more funds available for lending to spur economic growth but kept the key policy repo rate unchanged at 6.5 percent with an eye on inflation.

The CRR cut will infuse Rs 1.16 lakh crore into the banking system and decrease market interest rates.