CPI is now well within RBIs main inflation target of 4%, warranting a possibility of yet another 25 bps rate cut from the central bank in the upcoming April 2025 policy. If that were the case, a repo rate cut would lead to further revision in home loan EMIs and fixed deposit rates by banks.

The CPI inflation print for February falls below the mid-point of the MPC's medium term target range, led by cooling in food inflation

India’s Retail Inflation 2025, Retail Inflation outlook for February 2025 news updates: Retail inflation based on Consumer Price Index (CPI) dipped to 3.61 per cent in January, Government data showed on Wednesday.

Retail inflation in February dropped to a 7-month low of 3.61%. It remains within the RBI's target. Food inflation also saw significant reductions in both rural and urban areas. This decline may encourage the Monetary Policy Committee to cut the repo rate in April to boost GDP growth.

India’s Consumer Price Index (CPI) inflation fell to a seven-month low of 3.61 per cent in February 2025, surpassing expectations and creating room for a potential second consecutive interest rate cut by the Reserve Bank of India (RBI) next month, reported The Hindu.

This marks the first time in six months that it fell below the Reserve Bank of India's medium-term target of 4 per cent

The sharp decline in inflation has increased expectations for another rate cut by the RBI on April 9. If this occurs, it will mark the second rate reduction in just two months.

India's February consumer inflation likely eased below the Reserve Bank of India's medium-term target of 4.0% for the first time in six months on moderating food price rises, a Reuters poll showed, bolstering expectations of interest rate cuts.

The lower inflation reading could give the Reserve Bank of India room to cut rates and support its slowing economy.