Retail inflation below RBI target for first time in 5 yrs

India's retail inflation rate, based on the consumer price index, in July fell below the Reserve Bank of India's (RBI's) medium-term target of 4 per cent for the first time since August 2019 on the back of a high base and sharp reduction in food prices.

- SHIVA RAJORA

However, a senior government official said the central bank was going to "look through" the data and this was unlikely to lead to a policy rate cut.

Separately, growth in the index of industrial production (IIP) declined to a three-month low of 4.2 per cent in June from the upward revised figure of 6.2 per cent in the preceding month.

The data released by the National Statistical Office (NSO) on Monday showed the retail inflation rate decelerated to 3.54 per cent in July as against 5.08 in the preceding month and 7.44 per cent during the same month a year ago.

Government bond yields are expected to open marginally lower on Tuesday on the back of lower than expected domestic headline inflation print for July. The rate of 3.54 per cent was lower than the market expectations of 3.8 per cent.