New Delhi: Headline inflation fell to an over two-year low of 6.55 per cent in January on cheaper food items, which may prompt the Reserve Bank to cut policy rates in the coming months.
Headline inflation, as measured by the Wholesale Price Index (WPI), had stood at 7.47 per cent in December 2011. It was 9.47 per cent in January last year.
The latest numbers are the lowest since December 2009 when headline inflation was at 7.15 per cent.
On inflation, Finance Minister Pranab Mukherjee said that the rate of price rise was still not at an acceptable level and should fall further.
"I think it (inflation) should be further reduced since it is still not at acceptable level. I do hope (further) moderation will come," Mukherjee told reporters.
As per the official data released today, food inflation was (-) 0.52 per cent in January against 0.74 per cent in December.
Vegetables were cheaper by 43.13 per cent and wheat by 3.48 per cent on an annual basis. Potato and onion prices also fell by 23.15 per cent and 75.57 per cent year-on-year in January.
Food articles have 14.3 per cent share in the WPI basket and experts attributed the moderation in inflation to cheaper food articles.
Prices of manufactured items, which have a weight of around 65 per cent in the WPI basket, went up by 6.49 per cent year-on-year in January, as against 7.41 per cent in the previous month.
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