India's headline retail inflation rate, as measured by the Consumer Price Index (CPI), returned to 7 percent territory in August from a five-month low of 6.71 percent in July, according to data released on September 12 by the Ministry of Statistics and Programme Implementation.
At 7 percent, the August CPI inflation figure is slightly above the consensus estimate. As per a Moneycontrol poll, CPI inflation was seen rising to 6.9 percent.
CPI inflation has now spent 35 consecutive months above the Reserve Bank of India's (RBI) medium-term target of 4 percent and eight straight months outside the central bank's 2-6 percent tolerance range.
As such, the RBI is now on the brink of failing to meet its inflation mandate.
The RBI is deemed to have failed when average inflation is outside the 2-6 percent tolerance range for three consecutive quarters.