"The urban inflation rate increased by 13.83 percent (year-on-year) in August 2020 from 13.40 percent recorded in July 2020, while the rural inflation rate increased by 12.65 percent in August 2020 from 12.28 percent in July 2020".
On a year-on-year basis, the rate of increase in the prices was recorded in Kogi (17.29 percent), Bauchi (15.77 percent) and Ebonyi and Yobe (14.71 percent), while Lagos (11.45 percent), Kwara (11.22 percent) and Abuja (11.17 percent) recorded the slowest rise in headline year-on-year inflation. "RBI rate cut hopes still remain low at least at the October policy", said Rahul Gupta, head of research-currency at Emkay Global Financial Services.
Food inflation - or the rate of rise in food prices - was at 9.05 per cent last month, as against 9.27 per cent in July.
Data separately released by the industry department earlier in the day showed India's wholesale price inflation turned positive in August after a gap of four months when it remained in deflationary territory, signalling producers are slowly regaining their pricing power after the supply and demand shock triggered by the coronavirus pandemic. Aditi Nayar, principal economist at ICRA, said the RBI could take a cautious step in terms of monetary stance, in addition to a pause in repo rates, as inflation is unlikely to recede meaningfully this month. As retail inflation had inched up above 7 per cent towards the end of 2019, it is set to moderate in upcoming months. And will inflation ease going forward? Among the sub-segment, prices of manufactured food products rose the fastest at 4.7 per cent, as vegetable oils and animal oils, fats saw a sudden uptick in their prices.