New Delhi, Sep 12 (IANS): The government on Thursday informed that the year-on-year inflation rate (3.65 per cent), based on the All India Consumer Price Index (CPI), for the month of August was second lowest in the last five years, below the Reserve Bank of India's (RBI) 4 per cent inflation target.

Corresponding inflation rates for rural and urban areas were 4.16 per cent and 3.14 per cent in August, respectively.

In July, the inflation rate (3.54 per cent) had fallen below the RBI’s medium-term target of 4 per cent for the first time.

Year-on-year inflation rate based on the All India Consumer Food Price Index (CFPI) number was 5.66 per cent (provisional) for August. The corresponding inflation rate for rural and urban was 6.02 per cent and 4.99 per cent, respectively.

Food inflation for August was the second lowest since June 2023, according to the data by the Ministry of Statistics and Programme Implementation.

The decline in inflation was observed in ‘Spices’, ‘Meat and Fish’ and ‘Pulses and products’ categories.

Tomato showed the lowest year-on-year inflation (minus 47.91 per cent) as well as the lowest month-on-month change in index (minus 28.8 per cent).

The CPI in August was at 193 points (rural and urban) while the CFPI was 203.4. The ease in inflation comes as a welcome sign as it leaves more money in the hands of the workers to improve their living standards.

Meanwhile, RBI Governor Shaktikanta Das has said that the Central Bank will go a rate cut to spur growth once the inflation rate shows a durable alignment with the 4 per cent target rate. However, he said that the country’s inflation rate is expected to come down in the third quarter of the current financial year. He also said that domestic growth is resilient, supported by steady urban consumption.