Retail inflation hits 8-year low

India's retail inflation in July eased below two per cent for the first time in eight years, on the back of falling prices of food items including vegetables and pulses, hurting some farmers, but will have limited impact on the central bank's policy decision.

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Annual retail inflation slowed to 1.55 per cent in July as compared to 2.10 per cent in June.

The figure was the lowest since June 2017, according to a government statement, and below the Reserve Bank of India's tolerance band of two to six per cent. RBI mandated to not let inflation fall below or above the range for more than three quarters.

“These inflation numbers are on expected lines,” said Madan Sabnavis, an economist at Bank of Baroda, adding that the impact on the RBI's policy decision will be muted.