Indias inflation may continue to rise in the near term, OPEC stated in its monthly report. Headline CPI inflation remained above the RBIs 4% target in July, rising to 4.5%, y-o-y, after 4.4%, y-o-y, in June, while food inflation increased to 5.5%, y-o-y. Price pressures remained stronger in rural areas, where headline inflation stood at 4.8%, compared with 4% in urban centres, reinforcing the importance of the monsoon and food-supply conditions for the near-term outlook, it said. The composition remains somewhat more reassuring than the headline figure, as underlying inflation excluding precious metals is still relatively subdued, but second-round effects remain the key risk, particularly through food prices, transport costs, fertiliser, logistics and services. Developments in August have pointed to ongoing challenges, however, as reservoir levels remain below last years levels in several regions. Reservoir storage is an important indicator to watch in this respect, since it …
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