May Inflation Likely Cooled to 3% as Food Price Pressure Eases

India's consumer inflation rate likely eased to a more than six-year low of 3% in May thanks to a favorable base and a further moderation in food prices, a Reuters poll forecast, supporting last week's larger-than-expected interest rate cut.

- Reuters

BENGALURU:

On Friday the Reserve Bank of India (RBI) stunned financial markets by slashing its key policy rate by 50 basis points, double what was predicted, to boost economic growth as inflation has remained subdued.

The central bank, which targets inflation in the middle of its 2-6% range in the medium term, also shifted its policy stance to 'neutral' from 'accommodative'.

A snap Reuters poll after the decision found the RBI was likely done with cutting rates, wrapping up one of its shortest and shallowest easing cycles in more than a decade.