Slide in WPI-based inflation for the month of August

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Inflation plunging to a record low of (-)4.95% in August on cheaper fuel and vegetables, thereby putting pressure on Reserve Bank of India (RBI) to cut interest rate.

The Wholesale Price Index-based inflation was (-)4.05% in July. It was has been in the unsupportive zone since November 2014. In August 2014, inflation was 3.85%.

During the month of August, onion and pulses turned costlier with inflation at 65.29% and 36.40%, respectively. This was according to the data released on 14 September.

The food basket inflation remained negative for the second month in a row at (-)1.13%. For vegetables, it had declined to (-)21.21%, helped by potato at (-)51.71%.

The inflation rate was (-)16.50% in fuel and power segments, while in manufactured products it was (-)1.92% last month.

Besides pulses and onion, the food items that have become dearer in August are eggs, meat and fish (3.30%), milk (2.08%) and wheat (2.05%).

The inflation data for the month of June has been revised to (-)2.13%, as compared to provisional estimates of (-)2.40%.

The RBI tracks the Consumer Price Index-based inflation for its policy decisions, and its next review is due on September 29.

The CPI or retail inflation data is expected later in the day. CPI in July had recorded a low of 3.78%. Since the RBI wanted more clarity over inflation numbers in the months to come, it kept the key rate unchanged in its monetary policy review on August 4.

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