WPI inflation up 2.03% on factory goods and fuel, room for rate cut shrinks

WPI shows divergent trend from CPI counterpart, which fell to a 16-month low of 4.06%

Unlike its retail price counterpart, the wholesale price index (WPI)-based inflation rate rose to 2.03 per cent in January from 1.22 per cent in the previous month as fuel and non-food manufactured products faced price pressures. Economists feel there is no further room for rate cuts by the monetary policy committee of the Reserve Bank of India in the current cycle. 

The consumer price index (CPI)-based inflation rate, on the other hand, fell to a 16-month low of 4.06 per cent from 4.59 per cent over this period. While the directions of CPI and WPI inflation rates look divergent, a