RBI on brink of failure as retail inflation rises back to 7% in August

India's headline retail inflation rate, as measured by the Consumer Price Index (CPI), returned to 7 percent territory in August according to data released on September 12 by the Ministry of Statistics and Programme Implementation.

CPI inflation had fallen to 6.71 percent in July after spending three consecutive months above 7 percent.

At 7 percent, the August CPI inflation figure is slightly above the consensus estimate. CPI inflation was seen rising to 6.9 percent.

Having averaged 6.3 percent in January-March and 7.3 percent in April-June, inflation must fall to at least 4.1 percent in September for the July-September average to come in under 6 percent and the RBI to avoid failure - an unlikely scenario.