While inflation in food and beverages has moderated positively, the figures for fuel and light and clothing, bedding and footwear remain higher. Fuel prices can be expected to rise in the near future as well with prices of LPG and diesel being progressively aligned to market rates.
With the CPI inflation coming in at a lower level in December' 13, expectation of a lower WPI figure is reiterated. RBI may contemplate a rate cut if the WPI and CPI figures continue to move downwards in the next two months. Hence, while no change is expected in RBI stance in January, they could reconsider their options in March if such a trend persists.
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