Retail inflation cools further to 2.05 % in January on easing food prices

The Reserve Bank of India, which reduced the key lending rate by 0.25 % last week, mainly factors in CPI-based inflation while arriving at its bi-monthly monetary policy.

Retail inflation declined marginally to 2.05 % in January over the previous month on continued decline in food prices, including vegetables and eggs, said government data Tuesday.

A customer shops for pulses in a store at a local market in Hyderabad. (Bloomberg)

Retail inflation based on the Consumer Price Index (CPI) for December 2018 has also been revised downward to 2.11 % from the earlier estimate of 2.19 per cent. The inflation was 5.07 % in January 2018.

The data released by the Central Statistics Office further said the inflation in the ‘fuel and light’ category also fell to 2.2 % in January this year from 4.54 per cent in December 2018.

The Reserve Bank of India, which reduced the key lending rate by 0.25 % last week, mainly factors in CPI-based inflation while arriving at its bi-monthly monetary policy.

The central bank has revised downwards the retail inflation forecast to 2.8 % for the last quarter of the current fiscal on account of favourable factors including benign monsoon.