Wholesale inflation eases to 10-month low: January 2019

Wholesale price inflation slowed to a 10-month low in January on the back of sliding fuel, manufactured products and some food prices, opening up space for the RBI to cut interest rates. The annual rate of inflation, based on the monthly wholesale price index, was 2.8% in January compared to 3.8% for the previous month and 3% during the corresponding month of the previous year.

The easing in WPI comes on the heels of retail inflation slowing to a 19-month low of 2.1% in January, which once again justified the central bank’s move to cut interest rates by 25 basis points (100 bps = 1 percentage point) earlier this month — the first cut after 18 months.

Economists said they expect the RBI to cut rates by another 25bps in April.

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