Retail inflation cools to 10-month low of 3.69 pc in Aug

New Delhi, Sep 12 (PTI) Retail inflation cooled to a 10-month low of 3.69 percent in August -- below RBI's target of 4 percent -- on the back of easing prices of fruits, vegetables, and other food items, official data showed Wednesday.

The lower retail inflation print comes amid a spike in petrol and diesel prices that have been on the rise since August 16. Also, the rupee has weakened in the recent weeks, making imports costlier.

The Consumer Price Index (CPI) based inflation was at 4.17 percent in July and 3.28 percent in August 2017.

The previous low for CPI inflation was in October 2017, when it stood at 3.58 percent. Inflation remained above RBI's targeted rate of 4 percent since then.

The Central Statistics Office (CSO) data showed that inflation in the food basket fell significantly to 0.29 percent in August 2018 as against 1.37 percent in the previous month.

Vegetable prices declined by 7 percent in the month under review. The rate of price rise in fruits stood at 3.57 percent, compared to around 7 percent in July.

However, there was a moderate increase in inflation in the fuel and light segment. It rose to 8.47 percent in August compared to about 8 percent in July.

Diesel accounts for 40 percent of India's fuel basket and is consumed mainly by the transport sector.

The Reserve Bank of India (RBI) will be factoring in inflation data while deciding the interest rate at its next bi-monthly monetary policy meeting on October 5.

The central bank has been tasked to maintain the retail inflation at the level of 4 percent (with a margin of 2 percent on either side).

Price data are collected from selected towns by the Field Operations Division of the National Sample Survey Office (NSSO) and from selected villages by the Department of Posts. Price data are received through web portals, maintained by the National Informatics Centre.