After falling to 1.61 per cent in July, retail inflation has inched upwards marginally in the weeks thereafter. Inflation, as measured by the consumer price index, stood at 2.07 per cent in August as per data released by the National Statistics Office. With this latest reading, inflation has averaged 1.84 per cent so far in the second quarter (July-August) of the year, lower than the central bank’s most recent projection of 2.1 per cent made in the last monetary policy committee meeting. Since February this year, inflation has remained below the RBI’s target of 4 per cent.

This moderation is largely due to falling food prices. The consumer food price index, which had touched 10.87 per cent in October last year, had........

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