Key Highlights:
- CPI inflation eased to 6.8% y-o-y in August but remained above RBI’s upper tolerance for second month.
- The moderation was account of easing food inflation (9.2% y-o-y in August) due to active government intervention.
- Core CPI eased 20 bps to 4.9% y-o-y in August.
- Uncertainties on the weather front and volatile crude oil prices pose upside risk to the outlook.
- We expect RBI to maintain an extended pause in policy rates in 2023.
