Food Inflation declined further to (-1.03%) during the week ended January 14, 2012 as compared to (-0.42%) recorded in the corresponding period of the last year. Fall in onion, potato and wheat prices have dragged down the data during the period.
As per the data recorded, the prices of onion declined 79.10% over while potato prices plunged 22.46% and wheat declined .3.37%. the overall vegetable prices plunged 47.06% in January 14, 2012.
However, the prices of pulses became expensive by 12.77%, milk prices increased 12.25%, eggs, meat and fish prices were went up by 20.33% on an annual basis.
The index of primary articles was at 1.89% in January 14 against 2.47% recorded in the preceding week. The non-food primary articles inflation was recorded at 0.56% against 1.84% in the previous week. Fuel and Power Inflation was stood at 14.45%.
The present numbers signals that the headline inflation number would also see a decrease in this month, which would allow RBI to revise interest rates towards downwards. RBI had cut CRR by 50 basis points during the last monetary policy review meeting on the back witnessing sudden fall in Food Inflation, and inflation numbers in December.
As a result of reduction in CRR by RBI, the liquidity system in the banking sector increased, which will help banks to increase its profit margin significantly in the upcoming quarters.
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