India's consumer price inflation accelerated in August, after the central bank retained its policy rate citing inflation fears.
Consumer price inflation increased to 10.03 percent in August from 9.86 percent in July, preliminary data released by the Central Statistics Office showed Tuesday.
The consumer price index for food and beverages advanced 12.03 percent year-on-year in August, while clothing, bedding and footwear prices rose 10.71 percent. Fuel and energy prices were higher by 7.55 percent compared to August 2011, data showed.
Overall inflation for rural areas was 9.9 percent, higher than July's 9.76 percent. Inflation for urban areas increased to 10.19 percent in August from 10.1 percent in the previous month.
The Reserve Bank of India (RBI) on Monday left the lending rate unchanged at 8 percent and the borrowing rate at 7 percent in its mid-quarter review. In a bid to improve liquidity, the cash reserve ratio was reduced to 4.50 percent from 4.75 percent.
Despite strong opposition, the Indian government last week raised diesel prices by about 14 percent and limited the supply of subsidized cooking gas for each buyer adding to inflationary pressures.
The government also relaxed the ceiling for foreign direct investment into sectors such as aviation, retail and broadcasting. The government aims to cut its budget deficit to 5.1 percent of gross domestic product through March 2013.
by RTT Staff Writer
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