India's retail inflation slowed to a 11-month low of 3.69 percent in August, due to a fall in prices of kitchen items, including fruits and vegetables, data released by statistics office showed. NDTV delivers reliable information across all platforms: TV, Internet and Mobile.
India's retail inflation fell below the Reserve Bank of India's medium-term target in August, increasing the likelihood it will keep interest rates on hold in October after raising them at its past two meetings.
CPI inflation was at 3.58 per cent in October 2017 and has remained above RBI's targeted rate of 4 per cent since then.
On August 1, RBI revised the inflation projection for the second half of FY19 to 4.8 percent from 4.7 percent earlier.
Slowing inflation in food prices, which make up almost half of India's consumer price index (CPI), cancelled out price rises in imported goods stemming from the weakening rupee currency.
Factoring in these inflation risks, the monetary policy committee raised the central bank's benchmark repo rate by 25 basis points to 6.5 percent in its third bi-monthly monetary policy in August, after hiking it by 25 basis points in June.
Softening inflation could give Prime Minister Narendra Modi a boost as he faces general elections next year.
While oil prices have risen almost 15 percent this year, the rupee touched an all-time low of 72.78 per dollar on Wednesday and was expected to hover near there on a worsening trade balance. The tumble has sparked discontent in a country that relies heavily on imports for its fuel needs.
The RBI, which next meets on October 5, has raised its benchmark rate by a total of 50 basis points at its past two meetings, to 6.5 percent, while warning about inflationary pressures.
The IMF expects the central bank to gradually tighten monetary policy in order to tame inflation.