India’s wholesale inflation eased at 2.31 per cent in January on an annual basis, as against 2.37 per cent in December, government data showed on Friday.
India's retail inflation slowed to a five-month low in January, with food price inflation easing. Annual retail inflation was recorded at 4.31%, lower than economists' estimate of 4.6% and down from 5.22% in the previous month. Food inflation eased to 6.02% from 8.39% in December.
The Reserve Bank of India (RBI) expects inflation to average 4.8% in the current financial year, which ends on March 31, and forecasts it to fall to 4.2% next fiscal year. The central bank targets inflation at 4% within a tolerance band of 2 percentage points on either side.
Core inflation, which excludes volatile items such as food and energy, quickened to 3.7% in January from 3.6% in December.
RBI Governor Sanjay Malhotra had said that the central bank is alert to all pressures on inflation and will monitor the impact of rupee depreciation on local prices.
RBI repo rate cut
Last week, the Monetary Policy Committee (MPC) of the RBI, under new Governor Sanjay Malhotra, announced a 25 basis point reduction in the repo rate, lowering it to 6.25%.
Malhotra revealed that the committee unanimously decided to maintain a neutral stance, a shift made in October of the previous year, indicating flexibility to adjust policy rates in response to changing economic conditions.
"The MPC remains unambiguously focused on a durable alignment of inflation with the target while supporting growth," the RBI governor said.
The RBI had kept the repo rate unchanged at 6.5% for eleven consecutive meetings. In the December policy meeting, the MPC voted 5-1 in favor of maintaining the rate, focusing on stability while continuing to monitor inflation trends.
Source Name : Economic Times