Indranil Pan, Chief Economist, Kotak Mahindra Bank
WPI inflation moved lower mainly on the back of softer food and fuel inflation while manufacturing inflation remained steady. A bit of advantage was also seen on the core inflation, mainly from a drop in the metals segment due to a fall in global metal prices post the fear of a China slowdown and also due to the relative appreciation of the INR. Overall, this drop in the headline and core WPI inflation is unlikely to ruffle RBI from its current monetary policy stance. RBI will continue to maintain its focus on retail inflation and also be cognizant of the risks to headline inflation that could emerge from the food side out of poor monsoon and any demand led inflation from the policy side of the new government. RBI is thus expected to maintain a status-quo on monetary policy for most part of the year.Powered by Capital Market - Live News