What's NewInflation below RBI's mid-term target

The retail inflation slowed down for the second consecutive month to a 10-month low of 3.7 % year-on-year (YoY) in Aug'18. This led to the retail inflation falling below the RBI's mid-term target of 4% for the first time in nearly a year. Although a majority of the groups in the consumer price index (CPI) recorded a decline in inflation in Aug'18, core inflation (CPI excl. food and fuel) still remained elevated at 6%. (September 24, 2018)

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Food continues to mask the underlying inflation risk.

The wholesale (Wholesale Price Index (WPI)) inflation continued to decline for the second consecutive month reaching a 4-month low of 4.5% year-on-year (YoY) in Aug'18. The continuing softening of food prices has been keeping inflation contained. The food inflation fell to nearly a 3-year low, with prices falling by 2.3% YoY. However, the softening food continues to mask the underlying inflation threat as depicted by the core WPI which rose to...

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Monetary tightening visible as notes in circulation continue to fall for the second time since demonetization.

RBI Balance Sheet contains the assets and liabilities position of the Reserve Bank of India. The balance sheet gives a fair amount of idea of the components of money supply such as notes in circulation and deposits with banks in the economy. The notes in circulation recorded an unprecedented plummet of 33.6% MoM in November 2016, after the demonetization move of the government. Following this, 86% of the total currency in circulation ceased to...

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September 14, 2018

India Balance of Trade

Rise in exports help in narrowing India's trade deficit in August.

India’s trade deficit narrowed down to USD 17.4 billion in Aug’18 after having expanded to a near 5-year high pace of USD 18 billion in the pervious month. The reason for the marginal decline in trade balance can be pointed to the rise in exports, the highest since the last three months. 

Exports grew by 20.1% YoY in Aug’18 reaching USD 27.8 billion compared to USD 23.6 billion in Aug&...

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CPI inflation below RBI's mid-term target for the first time in nearly a year.


India's retail inflation, as measured by Consumer Price Index (CPI), slowed down for the second consecutive month reaching a 10-month low of 3.7% year-on-year (YoY) in Aug'18 from 4.2% YoY growth in the previous month.

The slowdown in the headline retail inflation comes after it reached a peak of 4.9% in Jun'18. The softening in inflation was in line with the market expectations (3.9% YoY, Bloomberg Po...

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Industrial production indicates strong consumption and recovery in investment demand.

In Jul'18, the industrial production grew at 6.6% year-on-year (YoY) compared to just a 1% YoY growth in July last year. Continued strong performance of manufacturing, electricity sectors and high consumer demand contributed to the strong industrial production.

However, the production is not as strong as the headline print depicts due to the favourable base effect in place as last year in Jul'18 the industri...

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