India’s consumer inflation rises to 4.82% in August

  • India’s consumer inflation rose to 4.82% in August from 4.45% in July.
  • Food inflation increased to 5.95%, while core inflation rose to 4.2%.
  • RBI will sell 1 trillion rupees of bonds starting September 16.

India’s consumer price inflation rose to 4.82% in August from 4.45% in July, edging above the 4.80% median forecast in a Reuters poll and reaching its highest level under a series that began in January. Food inflation accelerated to 5.95% from 5.52% after weak monsoon showers lifted prices for ginger, onion and garlic, while transport inflation rose to 4.60% from 4.43%. Price gains also extended to clothing, household goods, education and food-serving services, where inflation increased to 8.41% from 7.75%. Core inflation rose to 4.2% from 3.86%, according to HDFC Bank's Sakshi Gupta. The Reserve Bank of India held its policy rate at 5.25% last month, but meeting minutes showed that Governor Sanjay Malhotra and other officials supported an increase if inflation became more widespread. The RBI will sell 1 trillion rupees ($10.47 billion) of bonds beginning September 16 to absorb surplus liquidity, adding to indications of tighter financial conditions. Brent crude futures near $108 a barrel remain a major inflation risk for India, which imports nearly 85% of its oil needs.

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