As recent data revealed, India’s retail inflation rose up to 7 percent in August, as compared to 6.71 per cent in July.

This is followed by three months of India’s retail inflation easing from its peak, following the Reserve Bank’s repo rate hikes since May.

The Consumer Price Index or CPI inflation has remained above the RBI’s upper tolerance limit of 6 per cent for the eighth straight month, and has risen despite the central bank’s efforts to restrain the same.

The data said, "Food inflation, which is responsible for nearly half the CPI basket, quickened to 7.62 per cent in August this year, as against 6.69 per cent in July, as per data released by the National Statistical Office. The prices of cereals, pulses, vegetables, milk, pulses and other items saw a rise in August, as compared to July."

India’s retail inflation in August reached 7 per cent. This happened despite the country’s efforts to bring it down by holding in exports of wheat and putting a ban on rice exports as well. This may result in the RBI hiking its interest rates in the coming month.

The Monetary policy Committee meet of the Reserve Bank is supposed to start during the end of this month on September 30, where it is likely to take a decision regarding the inflation. So far, the RBI has raised its repo rates by 140 basis points to 5.4 per cent since May.

It is to be noted that the Retail inflation had remained above 7 per cent during the first three months of the financial year. The RBI expects the retail inflation to have an average of 6.7 per cent in the year to March.

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