NEW DELHI: Retail inflation eased to 3.61 per cent in February, driven by a decline in price rise for vegetables and protein-rich items, creating room for the Reserve Bank of India (RBI) to consider a second interest rate cut next month.
Consumer price index (CPI)-based retail inflation stood at 4.26 per cent in January and 5.09 per cent in February 2024. The year-on-year inflation rate for February 2025 was recorded at 3.75 per cent, according to data released by the National Statistics Office (NSO).
“A sharp decline of 222 basis points was observed in food inflation in February 2025 compared with January 2025. Food inflation in February 2025 is the lowest since May 2023,” the NSO stated.
The significant decline in headline and food inflation during February was primarily due to lower inflation in vegetables, eggs, meat and fish, pulses and related products, as well as milk and dairy products, the data showed.
The RBI, which is mandated to maintain retail inflation at 4 per cent (+/- 2 per cent), had cut the short-term lending rate (repo) by 25 basis points last month amid easing inflation concerns.
The central bank is set to announce its next bi-monthly monetary policy on April 9.
