INSUBCONTINENT EXCLUSIVE:
Consumer inflation eased to 3.69 per cent in August, from 4.17 per cent in the previous month, government data showed on Wednesday
That marked the first time retail inflation - determined by Consumer Price Index (CPI) - stood below the Reserve Bank (RBI) of India's
Wednesday's inflation data also fuelled expectations of a status quo on key interest rates in RBI's next policy review due in October
Economists in a poll by news agency Reuters had predicted retail inflation at 3.86 per cent.Food inflation stood at a provisional 0.29 per
cent in August, as against 1.30 per cent in the previous month, the Central Statistics Office said in its statement.Separate data showed
that industrial production, determined by the Index of Industrial Production (IIP), accelerated/slowed down to 6.6 per cent in July, from 7
(IIP).The data came at a time the rupee hit record lows amid weakness in emerging market peers and the domestic equity markets are
struggling with fund outflows
Besides, a continued surge in crude oil prices has fuelled concerns on the current account deficit front among investors."While weakness in
the rupee adds to the upside risk, factors such as still sanguine domestic food prices and moderation in global commodity prices (excluding
has so far remained well within RBI's projected trajectory
Bank of India (RBI) had in its August policy review projected consumer inflation at 4.6 per cent in the second quarter, and 4.8 per cent in
the second half of 2018-19.Crude oil prices have risen nearly 15 per cent this year while the rupee has depreciated 13 per cent against the
The rupee receded from recent record lows and closed at 72.19 against the dollar
Still, it is the worst performing Asian currency this year.The current account deficit - or the difference between the inflow and outflow of
foreign exchange - widened to $15.8 billion in April-June from $15.0 billion in the corresponding period a year ago.Credit ratings agency
Moody's expects the country's current account deficit to widen to 2.5 per cent of the GDP in the current fiscal year due to higher oil
prices that have been accentuated by rupee depreciation.The trade deficit, or the gap between exports and imports, had widened to an over
five-year high of $18 billion in July
Trade shortfall puts pressure on the current account deficit.The central bank has increased the repo rate - the key rate at which it lends
short-term funds to commercial banks - in its previous two bi-monthly policy meetings.(With agency inputs)
