According to reports, inflation was expected to increase by 10% in August but fell thereafter, which is said to more or less fall in line with the RBI’s forecast that it would remain around the current levels of being only above 9% at most till the end of the second quarter.

Also, the statement came after the CSO authorities disclosed that headline inflation had fallen to an eight-month low of 9.22 % in July as the increase in rate of price of food articles and petro-products had eased, though there is still pressure on the manufactured items.

The Finance Minister, Pranab Mukherjee said: “The inflationary pressures could ease because of the strong monsoon, and that the government would take steps to cool inflation”.

Hence, last month at the first quarter review of its monetary policy, the RBI disclosed that the inflation would supersede current levels at most till the end of the second quarter that ends on the September 30. The bank also expects inflation to drop to 7% by the end of the fiscal on the March 31 next year.

Moreover, the Central Bank had increased its forecast for inflation by the end of the year to a full percentage point from its May forecast of 6%, and in July, prices of food articles surged 8.19% year-on-year which is less than the 8.38% inflation recorded in the month of June.