Wholesale Inflation or the inflation based on the Whole Price Index (WPI) touched at ten month low, recently released data by the government revealed. The WPI Inflation was at 2.76% as compared to 3.80% in the previous month.
Wholesale inflation in January 2018, was at 3.02%, marginally higher then the current rate of 2.76%.The daily needs items and Kitchen essentials such as vegetables, eggs and fruits have witnessed a fall in prices.
Prices of manufactured goods, which constitute two-third to WPI, were also low to 2.61% in January as compared to 3.59% in December last year.
Retail Inflation too marginally declined from the previous month’s 2.19% to 2.05% in January, data released by the Central Statistics Office (CSO) indicates. The fall in the retail inflation rate is seen as a after effect of benign food inflation. As food products such as Vegetable and eggs are continuously witnessing a fall in prices from last few months.
The food prices in the Indian market are falling continuously, the effect of which is so great that it has negated the surge in the core-inflation which as of now is at 6.04%, 0.4% higher then upper limit mandated by the MPC for core inflation.
Read: Due to benign food inflation, retail inflation reaches to 2.05% : CSO reorted
Looking at such a benign inflation, RBI in its Bi-monthly policy announced a rate cut in its key lending rate, hoping that it would take the declining inflation Upwards.
Read: RBI announces rate cut, interest on loans expected to go down