CPI Inflation moderates to a 2-year low on further easing of food inflation - Angel Broking

The combined (rural + urban) Consumer Price Index (CPI) inflation moderated further to 8.1% during February 2014 as compared to 8.8% in January 2014. This easing can be attributed to the sequential 125bp deceleration in food inflation. Food articles inflation accounts for almost 50% weightage in the index and it eased to 8.6% as against 9.9% in the previous month and 12.0% in December 2013. Core CPI inflation too moderated slightly to 7.9% as compared to 8.1% in February 2014 aided mainly by a base effect. Nevertheless, we expect the RBI to hold monetary policy rates in its forthcoming policy on April 1, 2014 and until there is a sustained downtrend in headline CPI inflation below the 8.0%-level.

Source : Equity Bulls

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