Inflation falls, all eyes on RBI

India’s wholesale price index (WPI)-based inflation rate dipped to 4.7% in May, stoking demand for an interest rate cut by RBI on Monday amid speculation that a normal monsoon and good harvest would bring down prices further.

India’s wholesale price index (WPI)-based inflation rate dipped to 4.7% in May, stoking demand for an interest rate cut by RBI on Monday amid speculation that a normal monsoon and good harvest would bring down prices further.

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The decline in WPI inflation — the lowest in more than three years — comes on the heels of a moderation in May consumer price index (CPI) inflation, announced on Wednesday, to a four-month low of 9.31%. But, a weaker rupee will fuel commodity prices, making RBI’s job a challenging one.