CPI Inflation Eases But Stays Above RBI's Upper Tolerance

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.

CPI_Inflation-_August_2023