India’s central bank, Reserve Bank of India (RBI) is expected to keep interest rates on hold as country’s retail inflation eased in July 2018.
In July, country’s consumer prices recorded an upward movement of 4.17 per cent when compared to last year’s 2.36 per cent and a fall when compared to the last month’s figure, 4.92 per cent, according to the data released on Monday (13) by the Central Statistics Office (CSO) which functions under country’s Ministry of Statistics and Programme Implementation.
According to market analysts, India’s retail inflation for the month of July eased due to a slight rise in food prices and housing. July was the ninth consecutive month in which price rise was higher than the RBI’s medium-term mark of 4 per cent.
The RBI has elevated its benchmark rate by a total of 50 basis points at its past two meetings, to 6.5 per cent, mentioning about inflationary trends in the country. RBI’s next policy meeting is scheduled for October 5.
Depreciation of Indian Rupee (INR) which recorded a fall of 8 per cent this year, has driven up the prices of imported items such as petroleum products, electronics, machinery, and others. On Monday (13), the INR touched a record low of 69.95 against the US dollar following a weaker trend in the global market.
This year, in India, retail petrol prices have recorded a 10.4 per cent jump and diesel prices moved up by 15.2 per cent reducing the corporate profit margins. In the previous year, the prices of compressed natural gas (CNG) for automobiles and taxis in New Delhi moved up by 34.7 per cent.
Meanwhile, annual retail food inflation, which accounts for about half of the Consumer Price Index (CPI), eased to 1.37 per cent in July, when compared with 2.91 per cent increase in June 2018.
