IN­FLA­TION AT 10-MONTH LOW OF 3.69%

Financial Chronicle - - FRONT PAGE -

Re­tail in­fla­tion cooled to a 10-month low of 3.69 per cent in Au­gust, below RBI's tar­get of 4 per cent, on the back of eas­ing prices of fruits, veg­eta­bles and other food items.

RE­TAIL in­fla­tion cooled to a 10month low of 3.69 per cent in Au­gust — below RBI’s tar­get of 4 per cent — on the back of eas­ing prices of fruits, veg­eta­bles and other food items, of­fi­cial data showed on Wed­nes­day.

The lower re­tail in­fla­tion print comes amid a spike in petrol and diesel prices that have been on the rise since Au­gust 16. Also, the ru­pee has weak­ened in the re­cent weeks, mak­ing im­ports costlier.

The Con­sumer Price In­dex (CPI) based in­fla­tion was at 4.17 per cent in July and 3.28 per cent in Au­gust 2017.

The pre­vi­ous low for Con­sumer Price In­dex in­fla­tion was in Oc­to­ber 2017, when it stood at 3.58 per cent. In­fla­tion re­mained above RBI’s tar­geted rate of 4 per cent since then.

The Cen­tral Statistics Of­fice (CSO) data showed that in­fla­tion in the food bas­ket fell sig­nif­i­cantly to 0.29 per cent in Au­gust 2018 against 1.37 per cent in the pre­vi­ous month.

Veg­etable prices de­clined by 7 per cent in the month un­der re­view. The rate of price rise in fruits stood at 3.57 per cent, com­pared to around 7 per cent in July.

How­ever, there was a mod­er­ate in­crease in in­fla­tion in the fuel and light seg­ment. It rose to 8.47 per cent in Au­gust com­pared to about 8 per cent in July.

Diesel ac­counts for 40 per cent of In­dia’s fuel bas­ket and is con­sumed mainly by the trans­port sec­tor. The Re­serve Bank of In­dia (RBI) will be fac­tor­ing in in­fla­tion data while de­cid­ing the in­ter­est rate at its next bi-monthly mone­tary pol­icy meet­ing on Oc­to­ber 5.

The cen­tral bank has been tasked to main­tain the re­tail in­fla­tion at the level of 4 per cent (with a mar­gin of 2 per cent on ei­ther side).

Price data are col­lected from se­lected towns by the Field Op­er­a­tions Divi­sion of the Na­tional Sam­ple Sur­vey Of­fice (NSSO) and from se­lected vil­lages by the Depart­ment of Posts.

Price data are re­ceived through web por­tals, main­tained by the Na­tional In­for­mat­ics Cen­tre.

The de­cline came amid a spike in petrol and diesel prices and weak­en­ing ru­pee on the back of eas­ing prices of fruits, veg­eta­bles and other food items

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