India's retail inflation stood at 6.93% in July

India's retail inflation for the month of July stood at 6.93 percent as against 6.23 percent in the month-ago period, National Statistical Office (NSO) data released on August 13 showed. The consumer price index (CPI)-based inflation rate for June has been revised from 6.09 percent to 6.23 percent.

The combined food price inflation (CFPI) for July stood at 9.62 percent, against 8.72 percent a month ago. Inflation in vegetables basket was 11.29 percent in July, against 1.86 percent in June. In the fuel and light segment, inflation for the same month was 2.80 percent against 2.69 percent in June.

In cereals and related products, inflation stood at 6.96 percent in July, against 6.49 percent in June. In meat and fish, it stood at 18.81 percent against 16.22 percent a month ago. For pulses and products, it stood at 15.92 percent in July against 16.68 percent in June.

The consumer price index (CPI) data for the months of April and May were not released by the Centre due to insufficient data collection amid the coronavirus pandemic and the lockdown that followed.

In the last two consecutive quarters (January - March of FY 2019-20 and April - June of FY 2020-21), the average consumer price index-based inflation breached 6 percent. The Monetary Policy Committee (MPC) needs to target inflation to keep it within 4 percent, within a band of +/- 2 per cent.

During its policy announcement earlier this month, the Reserve Bank of India (RBI) said it expects headline inflation to remain elevated in the second quarter of FY 2020-21.

RBI Governor Shaktikanta Das said food prices are expected to increase in the near term, due to broken supply chains as a fallout of the COVID pandemic. Overall inflation is expected to remain elevated in the near term because of costly petrol and diesel prices.

The central bank's Monetary Policy Committee had kept the repo rate unchanged at 4 percent and maintained its accommodative stance. Repo rate is the rate at which RBI lends funds to commercial banks.