NEW DELHI, June 29: India’s inflation has fallen to a 14-month low helped by lower food prices, data on Friday showed, easing pressure for further interest rate hikes. The wholesale price index, India’s closely watched cost-of-living monitor, showed inflation slowed to a lower-than-expected 4.03pc for the week ended June 16, from 4.28 per cent a week earlier and 5.5 per cent a year ago.

The latest figure was comfortably within the central bank’s medium-term inflation target of 4.0 to 4.5 per cent.

“It’s a positive surprise,” said D.K. Joshi, principal economist at leading Indian credit rating agency Crisil. “The central bank can now afford to adopt a wait-and-watch policy and refrain from raising rates for the time being.”

The central bank has hiked benchmark rates nine times since late 2004, driving borrowing costs to five-year highs. Its next monetary policy review is on July 31.

In early February, inflation hit a more than two-year high of 6.73, sparking warnings that the economy, which expanded by a scorching 9.4pc in the 2006-07 financial year, could be overheating. —AFP