Wholesale prices fell further in July on cheaper global commodities, piling up pressure on the Reserve Bank of India to cut interest rates to give a push to the economy which is recovering at a slow pace.
Stocks rose sharply on Friday , as expectations of an imminent rate cut after the consumer price inflation also came in below estimates, helping the markets shrug off worries due to China's devaluation of the yuan.
The Wholesale Price Index fell 4.05%, deepening the decline in wholesale prices, which have now fallen for ninth straight months.In June, the index had dropped 2.4%. Retail inflation had moved at a benign pace of 3.8% in the past month.
RBI is scheduled to review monetary policy next on September 29, but Governor Raghuram Rajan had not ruled out a rate cut before that while announcing the policy last on August 4, when he left the rate unchanged. RBI had cut its policy rate thrice this year, by a combined 0.75%.
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