MUMBAI, Aug 18 Reuters Inflation in India may still require a monetary policy response going forward as it remains above the target range even though it has eased in recent months, the Reserve Bank of India said on Thursday.

In India, supply conditions are improving, with the recent monsoon pickup, strong momentum in manufacturing and a rebound in services, the central bank said in an article on the state of the economy, published in its monthly bulletin.

Inflation has edged down, but its persistence at elevated levels warrants appropriate policy responses to anchor expectations going forward, RBI added.

India39;s consumer inflation dipped to 6.71 in July, easing for the third month in a row and helped by a slower increase in food and fuel prices but it remained above the RBI39;s 2 to 6 tolerance band for a seventh straight month.

Imported inflation pressure points remain the overarching risk, followed by pending passthrough of input costs if producers regain pricing power, and wages, RBI wrote.

Yet, some risks have turned down commodity prices, especially of crude; supply chain pressures; revving up of monsoon activity due to the depression in the Bay of Bengal, it added.

The RBI39;s monetary policy committee raised the bank39;s key lending rate by 50 bps earlier in the month, its third increase in four months to curb rising price pressures.

RBI also highlighted that portfolio inflows had turned positive for India in August so far after a long hiatus, but it…