The consumer price index (CPI) inflation rate for August 2018 stood at 3.69 percent against July’s 4.17 percent, showed data by the Ministry of Statistics and Programme Implementation.

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A poll by CNBC-TV18 had expected inflation to be in the range of 3.5 to 3.8 percent.

The food inflation for August stood at 0.29 percent compared to 1.37 percent in July, while the fuel and light inflation was at 8.47 percent compared to 7.96 percent in the previous month.

CPI in the first half of 2018-19 averaged around 4.4 percent.

source: tradingeconomics.com

Analysts on an average expected the inflation figure to decline month on month in August 2018, with a sub 4 percent figure.

Experts added that the core CPI will likely moderate to 5.9 percent, compared to 6.3 percent in the previous month, supported by favourable base due to HRA implementation last year.

Higher petrol and diesel prices will have an impact on the core and overall inflation. Liquefied Petroleum Gas (LPG) prices have also climbed over the month.

The main reason for increasing the repo rate by 25 basis points is to maintain 4 percent Consumer Price Index target on a durable basis, said Reserve Bank of India (RBI) governor Urjit Patel.

This could be temporary as a weakening rupee and rising crude oil prices would boost consumer prices.

While oil prices have risen nearly 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.

Fuel prices were little changed in three of the four major cities on Wednesday after rising for six consecutive days.

Petrol and diesel prices in the Delhi National Capital Region were at Rs 80.87 per litre and Rs 72.97 per litre, respectively.

CPI inflation for the second half of 2018-19 was revised to between 4.8 percent against 4.7 percent projected earlier, the RBI said in its Monetary Policy Statement.

First Published:Sept 12, 2018 5:36 PM IST