India’s retail inflation is expected to remain high in August, primarily driven by the surge in food prices due to supply disruptions caused by the COVID-19 pandemic. However, the Reserve Bank of India (RBI) Governor, Shaktikanta Das, has stated that the Consumer Price Index (CPI) is likely to start moderating from September onwards. The RBI Governor made this statement during the Monetary Policy Committee (MPC) meeting, where the central bank announced its decision to keep the repo rate unchanged.

The retail inflation, or the CPI, rose to 5.59% in July, primarily due to the increase in food prices. Inflation has been a major concern for policymakers as it affects the purchasing power of consumers and the overall economic stability. The RBI has been closely monitoring the inflation levels and taking necessary measures to control it.

During the MPC meeting, the RBI Governor acknowledged that the high retail inflation in August was a result of increased prices of certain food items like pulses, edible oils, and vegetables. He attributed these price hikes to the supply chain disruptions caused by the COVID-19 pandemic. Das also mentioned that the prices of petrol and diesel have remained elevated, which has also contributed to the overall inflation.

However, the RBI Governor expects the retail inflation to start moderating from September onwards. He mentioned that favorable base effects, along with lower core inflation, would help in the moderation of inflation in the coming months. Das highlighted that the supply side measures taken by the government, along with the good monsoon, are expected to ease the food inflation gradually.

The central bank has been employing various measures to support economic growth and enhance liquidity in the system amid the COVID-19 crisis. While keeping the repo rate unchanged at 4%, the RBI has emphasized that it will continue to maintain an accommodative stance until the economy shows signs of sustained recovery.

In conclusion, India’s retail inflation is expected to remain high in August, but the RBI Governor is optimistic about the inflationary pressures starting to moderate from September onwards. With favorable base effects and government measures addressing the supply disruptions, the Retail Price Index is expected to ease in the coming months.