India Inflation at 4.38% Breaches RBI's 4% Target

India's annual inflation rate rose to 4.38% in June, breaching the central bank's 4% medium-term target for the first time in 16 months. The print exceeded the 4.3% forecast and accelerated from 3.93% in May, the Ministry of Statistics said.

Higher food and fuel costs drove the increase, with the Ministry citing a delayed monsoon and elevated energy prices. The Reserve Bank of India targets headline inflation at 4% within a 2% to 6% tolerance band. At its last policy meeting in May, the RBI held the repo rate steady at 5.25%.

The faster pace of price rises puts pressure on the central bank to adjust its stance. The next policy decision is scheduled for early August.