India's Inflation Rate Declines, Opens Door for RBI's Repo Rate Cut

Retail inflation in India dropped to 3.61% in February due to decreased prices in vegetables and protein-rich items, offering a chance for the Reserve Bank of India to consider another interest rate cut. This marks a significant decrease from the 5.09% in February 2024.

In February, India's retail inflation fell sharply to 3.61%, primarily driven by a decline in the cost of vegetables and protein-rich items. This financial climate presents a potential opportunity for the Reserve Bank of India (RBI) to contemplate another interest rate cut in the coming month.

According to data from the National Statistics Office (NSO), the consumer price index-based inflation was notably lower at 4.26% in January and a significant decrease from 5.09% in February 2024. February 2025 also saw a year-on-year inflation rate of 3.75%, indicating a positive trend.

The central bank previously reduced its short-term lending rate by 25 basis points and aims to maintain retail inflation around 4%. The RBI is planning to announce its next bi-monthly monetary policy on April 9, fueling speculation about possible further measures.

(With inputs from agencies.)