Consumer Inflation Eases, RBI Rate Cut Hopes Rise

Retail or consumer inflation eased in February – after edging up for six straight months – helped by falls in prices of some food items. This has raised expectations of a rate cut from the Reserve Bank next month.

Retail food inflation in February eased to 5.30 per cent, compared with 6.85 per cent recorded in the previous month.

Analysts say RBI Governor Raghuram Rajan could soften monetary stance after Finance Minister Arun Jaitley stuck to a fiscal deficit target of 3.5 per cent of GDP for next fiscal year in his third Budget last month.

Annual consumer prices, which the RBI closely tracks to set its interest rate policy, gained 5.18 per cent in February, compared with a rise of 5.69 per cent in January.

The central bank aims to bring retail inflation down to 5 per cent by March 2017. The RBI will hold its next policy meet on April 5.

Data released earlier in the day showed that wholesale prices fell for a 16th straight month in February, declining an annual 0.91 per cent, driven down by tumbling oil prices. (With Agency Inputs)

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Source:Ndtv

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