Inflation eases to 7.25% in June, but RBI may not cut rates

K.R. Srivats Updated - March 12, 2018 at 02:38 PM.

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Aided by softening of manufactured product prices, headline inflation slowed to its lowest level in five months at 7.25 per cent in June. This is against 7.55 per cent in May and the revised 7.5 per cent for April. It is also much lower than the 9.51 per cent level in June 2011.

With food inflation still in double digits and the monsoon playing truant, the Reserve Bank of India may not cut rates on July 31 when it does its first quarter policy review.

The Finance Ministry on Monday hoped that declining trend in headline inflation would continue on the back of likely improvement in the food supply situation. “Availability of food articles is expected to increase and this will address supply constraints,” Mr Namo Narain Meena, Minister of State for Finance, told reporters here.

The fall in inflation will be a significant input for the RBI to take a view on monetary policy, Mr R. Gopalan, Economic Affairs Secretary, said.

The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, said the whole inflation scenario was still a matter of concern. “Inflation is high mainly because of food and non-core elements. We hope we will be able to bring it down,” he said.

krsrivats@thehindu.co.in

Published on July 16, 2012 06:19