India's wholesale inflation turns negative at -0.92% for April, lowest since July 2020
New Delhi, May 15: Wholesale inflation in India, as measured by the Wholesale Price Index, fell to -0.92% in April, according to official figures issued by the Ministry of Commerce and Industry.
This is the first time this has happened since July 2020. The wholesale inflation has been falling, and it was 1.34 percent in March, down from 3.85 percent in February.
Overall wholesale inflation was 8.39 in October and has since fallen. Notably, until September, wholesale price index (WPI)-based inflation had been in double digits for 18 months in a row.
Food articles, cereals, wheat, vegetables, potatoes, fruits, eggs, meat and fish, minerals, crude petroleum and natural gas, and steel, among other things, contributed to the April fall in inflation.
In India, retail inflation fell substantially in April to 4.7 percent, an 18-month low, from 5.7 percent the previous month.
Retail inflation in India has been above the RBI's 6% target for three consecutive quarters, and it will only return to that level in November 2022.
The RBI is regarded to have failed in managing price hikes under the flexible inflation targeting framework if CPI-based inflation falls outside the 2-6 percent range for three quarters in a row.
The Reserve Bank of India decided to keep the key benchmark interest rate -- the repo rate (the rate at which the RBI lends to other banks) -- unchanged at 6.5 percent in its first monetary policy review meeting this fiscal in April, to assess the effects of the policy rate tightening done thus far.
Barring the recent pause, the RBI has increased the repo rate by 250 basis points cumulatively since May 2022.
Raising interest rates is a monetary policy tool that normally helps to reduce demand in the economy, allowing the inflation rate to fall.
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- ANI
