With cheaper commodities and Reserve Bank of India’s rate cut hopes, Wholesale Price Index (WPI) inflation continued to be in negative zone for the 10th month in a row, plunging to a record low of (-) 4.95 per cent in August. Retail inflation also followed the similar trend, falling to a new low of 3.66 per cent in August due to a slower rate of price rise in vegetables, fruits and protein items, except pulses.
As far as the prices of onion and pulses are concerned, wholesale prices of most of the food articles either declined or showed a very marginal increase during the month. Experts feel that this continued deflationary trend may prompt the RBI to cut rates at its policy meet on September 29.