Inflation based on Wholesale Price Index declined to a 3-year low of 7.18% in December, but failed to provide relief to consumers as retail prices rose to cross the double digit mark in the same month.
Wholesale price inflation falling for the third consecutive month is expected to prompt the RBI to cut interest rates in its forthcoming quarterly review of monetary policy on January 29.
The Wholesale Price Inflation eased mainly on account of fall in prices of manufacturing products and fuel and power.
However Retail Inflation rose for the third successive month in December at 10.56%, driven by higher prices of vegetables, edible oil, pulses and cereals.
Prime Ministers Economic Advisory Council Chairman C Rangarajan felt that the RBI may lower the policy rate later this month.
Courtesy: THE HINDU
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