Overall food inflation in July stood at 5.52 per cent as the prices of potato plummeted by as much as (-)16.56 per cent during the month while ladies’ fingers, peas, and tomatoes turned cheaper by about (-) 5 per cent. However, the prices of ginger, garlic and onions shot up during the month, the figures showed.

Among the other goods which turned cheaper during June were cars, which registered a (-) 6.72 per cent decline in prices.

The year-on-year housing inflation rate for the month stood at 2.22 per cent.

Sequentially, the inflation rate in July has moved up from 4.38 per cent in the previous month of June.

The CPI inflation is well within the RBI safe zone, which has 4 per cent as the midpoint. The tolerance zone of the RBI ranges from 2 per cent to 6 per cent. The RBI’s monetary policy aims to keep inflation within this zone as it balances its objective of promoting economic growth with stability.

RBI Governor Sanjay Malhotra said last week, after the announcement of the monetary policy review, that headline inflation has moved above target mainly because of higher fuel prices, while broader price pressures remain in check. The RBI maintained a status quo on the repo rate to push growth.

The central bank cut its forecast for average inflation in the current financial year to 5 per cent from the 5.1 per cent it projected ⁠in June. The forecast for core inflation, which excludes food and fuel, was cut more steeply to 4.3 per cent from 4.7 per cent earlier.

The RBI has also upped its growth forecast to 6.7 per cent from 6.6 per cent, reflecting confidence in the economy’s resilience despite a mixed flow of incoming data.