New Delhi: Inflation based on wholesale prices eased to a four-month low of 4.53% in August on softening food prices, especially vegetables. Inflation based on the Wholesale Price Index (WPI) based inflation was 5.09% in July and 3.24% in August last year. According to government data released on Friday, food articles registered deflation at 4.04% in August 2018. Last month, deflation in this category was 2.16%. Deflation in vegetables was 20.18% in August, as against 14.07% in the previous month.

The deflationary trend in food articles offset double-digit inflation in the ‘fuel and power’ basket in August. Inflation in this category was 17.73% as prices of domestic fuel increased during the month, in line with global crude oil rates. While inflation in liquefied petroleum gas (LPG) was 46.08%, in diesel and petrol it was 19.90% and 16.30%, respectively, during August.

Among food articles, potato inflation continued to rule high at 71.89% in August, while onion and fruits witnessed deflation of 26.80% and 16.40%, respectively. Deflation continued in pulses at 14.23% in August.

The 4.53% inflation is the lowest in four months, and a lower rate than this was last seen in April, at 3.62%. The WPI inflation for June was revised downwards to 5.68% from the provisional estimate of 5.77%.

Brent crude is hovering at around $79 a barrel. This, along with a depreciating rupee, has increased the oil import bill, thereby making petrol and diesel costlier. Petrol prices on Thursday climbed to an all-time high of 81 per litre in Delhi, while in Mumbai it inched up to 88.39. A litre of diesel in the national capital was priced at 73.08 and 77.58 in Mumbai.

Data released earlier this week showed retail inflation eased to a 10-month low of 3.69% in August. The RBI mainly takes into account retail inflation data while formulating monetary policy. In its third monetary policy review for the fiscal, the Reserve Bank last month hiked the interest rate by 0.25% to 6.5% on inflationary concerns.

For July-September, the RBI pegged CPI-based retail inflation at 4.2%, which it saw firming up to 4.8% in the second half of the current fiscal year.

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