NEW DELHI (Reuters) – India’s retail inflation accelerated to 2.07% in August as food prices inched up, but stayed within the central bank’s tolerance band for the tenth consecutive month.
Annual retail inflation quickened from a revised 1.61% in July and was above a Reuters poll of 2.1%.
The Reserve Bank of India is mandated to not let inflation overshoot its tolerance range of 2%-6% for more than three quarters in a row.
Food prices in August fell 0.69% compared with a decline of 1.76% in July while vegetable price fell 15.92% from a fall of 20.69% in the previous month.
Food prices are expected to rise following above-normal rainfall in August, and an expectation of similar showers in September, which could damage India’s summer-sown crops like rice, cotton, soybean and pulses.
Tax cuts announced by Prime Minister Narendra Modi on food and hundreds of consumer items are expected to lower inflation in the coming months.
(Reporting by Nikunj Ohri; Editing by Mrigank Dhaniwala)
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