India's wholesale price-based inflation eased to a nine-month low in February as food and fuel prices moderated, raising expectations that the central bank would leave interest rates unchanged at its policy review next month. The wholesale price index (WPI), long regarded as India's main inflation measure, rose a slower-than-expected 4.68 percent last month from a year earlier.
A 10 percent drop in wholesale vegetable prices from January helped overall inflation ease for the third straight month. Friday's data comes on the heels of a faster-than-expected slowdown in consumer inflation, which eased for a third straight month to a 25-month low of 8.10 percent in February.
It is also the last major economic data before the Reserve Bank of India's (RBI) policy review on April 1 and national elections that begin on April 7. "For policy, CPI is more relevant and based on latest CPI reading, we expect RBI to keep rates steady in the April policy review," said A. Prasanna, an economist at ICICI Securities Primary Dealership Ltd in Mumbai. In its bid to tamp down inflation, the RBI has raised interest rates three times since September, even as the country's economic growth sputtered.
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