0
MUMBAI: Indian food prices fell in late December, the first decline for nearly six years, official data showed Thursday, raising hopes that India's central bank may loosen its tight monetary policy stance.
In the week ended December 24, the wholesale price index for food articles fell 3.36 per cent from a year earlier, as prices of pulses, vegetables and potatoes tumbled.
Food price inflation has been in double digits for more than a year, causing hardship for India's impoverished masses and heaping pressure on the Congress-led government.
“There has been substantial improvement,” Finance Minister Pranab Mukherjee said in response to the data.
“Food inflation has turned negative for the first time in the recent memory.”The fall in the food index will increase expectations that headline inflation, at 9.11 per cent, could ease in coming months and lead the Reserve Bank of India (RBI) to start lowering interest rates.
The bank last month kept rates on hold, as the country continued to fight high inflation amid an economic slowdown and weakening rupee.
The RBI has raised interest rates 13 times since March 2010, angering business leaders who complain it has hit growth and investor confidence in India.
