NEW DELHI- India’s retail inflation rate touched a three-month low of 5.10 percent in January as prices of some food items rose more slowly, data showed on Monday, although the central bank is expected to wait before cutting rates as inflation remains above its target rate.
Annual retail inflation eased in January from 5.69 percent in December, government data showed, and was in line with a 5.09 percent forecast by a Reuters poll of 44 economists.
Last week, Reserve Bank of India (RBI) left interest rates unchanged, signaling that cuts may be some time away as it focuses on getting inflation to 4 percent on a sustainable basis.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose 8.30 percent in January, compared with a 9.53 percent rise in December.
Prices of cereals rose 7.83 percent year-on-year in January compared to 9.93 percent in the previous month, while vegetable prices rose 27.03 percent compared to 27.64 percent in December, the data showed.
“CPI inflation came in slightly softer than our expectations,” said Upasna Bhardwaj, chief economist at Mumbai-based Kotak Mahindra Bank.
But uncertainties about food inflation are likely to keep the central bank “cautious in the near term”, she said. – Reuters
