February retail inflation rises to 2.57%

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With this reading, inflation has come below the Reserve Bank of India's medium-term target of 4% for the seventh month in a row

Consumer price inflation (CPI) for the month of February 2019 rose to 2.57% as against a 19-month low of 2.05% clocked in the month of January 2019. With this reading, inflation has come below the Reserve Bank of India's medium-term target of 4% for the seventh month in a row and closer to the lower end of its 2-6% buffer range for a fourth month. The lower inflation reading for the month of Feb may lead to another repo rate cut by the RBI in its April policy. It may be noted that RBI earlier last month, in a surprise move, lowered the repo rate—its key lending rate—by 0.25 percentage points to 6.25% and changed its stance to "neutral" from "calibrated tightening", signaling higher chances of more cuts in the coming months if inflation persisted within tolerable limits. Analysts believe, there could be another 25 basis point cut in repo rate in April to boost economic growth and push credit off take.

 

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