India’s wholesale inflation rate declined to 2.38 per cent in September, down from 3.74 per cent for August and 5.41 per cent in July and 7.05 per cent in September 2013, signalling easing inflationary pressure at the broader level in the economy.
The build-up in wholesale inflation rate in the financial year so far is pegged at 2.61 per cent compared with a build-up rate of 6.23 per cent in the corresponding period of the previous year.
This comes one day after the government data for last month showed consumer inflation easing to 6.46 per cent, its lowest level since January 2012, the first month for which a revised national retail inflation started being compiled.
The lower wholesale inflation may not in itself induce a looser monetary policy but the cocktail of both lower consumer and wholesale inflation may force RBI to relook at a rate cut sooner than expected. RBI is now targeting moderation of consumer inflation for deciding key policy rates and has sought to bring it down to 8 per cent by January 2015 and 6 per cent by January 2016.
The decline in wholesale inflation was attributed to moderation in food prices as also a decline in price of petrol and edible oils in line with a sharp fall in price of crude oil.
Global crude prices have crashed further this month, which may lead to sharper cut in prices of oil related products in the inflation numbers for October.
The fifth bi-monthly monetary policy statement of RBI is scheduled on Tuesday, December 2, 2014.
(Edited by Joby Puthuparampil Johnson)