Consumer inflation was at 4.17 per cent in July, government data showed on Monday.
Economists in a poll by news agency Reuters had estimatedJuly consumer inflation at 4.51 per cent.At 4.17 per cent, consumer inflation remains above the Reserve Bank of India'smedium-term target of 4 per cent for the ninth straight month.Determined by Consumer Price Index (CPI), consumer or retail inflation in June wasrevised to 4.92per cent, from a provisional 5 per cent previously.Food inflation in July stood at a provisional 1.37 per cent, compared with2.91 per cent in the previous month, theCentral Statistics Office noted in its statement."The core CPI inflation recorded only a mild decline in July 2018, with an uptick in inflation for miscellaneous items weighing against the correction in the other components," said Aditi Nayar, principal economist at ICRA."If the recent depreciation of the INR sustains, it may modestly feed into the CPI inflation over the near term.
Crude oil prices continue to display a volatile trend, driven by geopolitical risks and concerns regarding supply as well as demand in various parts of the world," Ms Nayar added.The rupee closed at a record low of 69.93 against the US dollar on Monday, amid weakness in emerging market currencies triggered by a plunging Turkish lira.The lira, down over 40 per cent against the greenback so far this year, hit a new low on Monday at 7.24 per dollar on concerns of the country's worsening ties with the US.The central bank had, in itsthird bi-monthly monetary policy statement for 2018-19, earlier this month projected retail inflation at 4.6 per cent in the second quarter of the financial year and 4.8 per cent in the second half.The RBI expects consumer inflation at 5 per cent in the first quarter of next financial year (2019-20).