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    Retail inflation cools to 18-month low of 2.5% in January

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    Retail inflation cools to 18-month low of 2.5% in January

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    Retail inflation in January 2019 fell to 2.05 percent against an 18-month low of 2.19 percent in December 2018.

    Retail inflation in January 2019 fell to 2.05 percent against an 18-month low of 2.19 percent in December 2018 on easing food prices.
    A poll by CNBC-TV18 had expected inflation to be in the range of 1.5 to 2.8 percent for the month of January. The January retail inflation was expected to remain muted while the core inflation was expected to be aided by softer petrol and diesel prices and waning impact of hike in HRA.
    The Consumer Price Index (CPI)-based retail inflation was revised downwards for the preceding month December to 2.11 percent from the earlier estimate of 2.19 percent, showed data from the Central Statistics Office (CSO).
    In the year-ago month, January 2018, the retail inflation was at 5.07 percent.
    According to data showed by the ministry of statistics and programme implementation, the food inflation for January stood at -2.17 percent compared to a negative print of 2.51 percent in December, while the fuel and light inflation stood at 2.20 percent compared to 4.54 percent in the previous month.
    Fruits, vegetables and eggs continued to witness deflationary trend during January this year, with their prices declining 4.18 percent, 13.32 percent and 2.44 percent, respectively, according to the data.
    Analysts on an average expected the CPI data to be marginally higher from last month. They added, the food inflation to see an improvement.
    The Reserve Bank of India (RBI) projected the Consumer Price Index (CPI) at 2.8 percent for the January-March quarter and 3.2-3.4 percent for the first quarter of the next financial year, that is the April-September period.
    "Continuing deflation in food items, a sharp fall in fuel inflation and some edging down of inflation excluding food and fuel contributed to the decline in headline inflation," the statement said.
    CPI is  widely used as a macroeconomic indicator of inflation, as a tool by governments and central banks for inflation targeting and for monitoring price stability, and as deflators in the national accounts.
    The RBI cut the key policy rates by 25 basis points in its sixth bi-monthly policy announced on Thursday. With this, the repo rate stands at 6.25 percent, while the reverse repo rate stands at 6 percent.
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