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 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.

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.

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

India's retail inflation fell below 4% in February for the first time in six months mainly due to a decline in vegetable prices, giving the central bank room to cut rates further in coming meetings.

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