Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on August 2020 CPI:
"The CPI for August 2020 doesn't indicate any major relief from the inflationary pressures with the print at 6.69% as against the revised figure of 6.73% in July. The food inflation hasn't shown much of a decline, staying put at 9.05% and highlighting the continuing supply constraints in the economy. There has only been a slight moderation in the YoY inflation of meat and fish (16.5%) and pulses (14.4%) while it has remained at the same levels for edible oils (12.4%) and vegetables (11.4%). Clearly, a double digit inflation in some of these key food categories before the festive season will remain a concern for the policy makers. Core inflation also continues to remain above 5% due to cost push pressures and reinforces the potential risks of stagflation in a contractionary economy, as highlighted earlier by Acuité Ratings. The continuing concerns on inflation and higher fiscal deficit will lead to an extended pause on rate cuts and even increase the bond yields from the current levels despite the deployment of liquidity and yield management tools by RBI."