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Pulled down by weak global crude oil prices, the wholesale price index (WPI) based inflation remained in the negative territory for the eighth consecutive month at (-) 2.4 percent in June.
This June WPI print was lower than the (-) 2.36 percent recorded in May, official data released on Tuesday showed.
Manufactured products inflation - which carried the largest weight of about 65 per cent in WPI basket - remained in the negative territory for the fourth straight month in June 2015 at (-) 0.77 per cent.
On the other hand, food articles inflation-which has weight of 15 per cent in the WPI -- climbed 2.8 per cent, lower than 3.80 per cent in previous month.
Within the food articles space, prices of pulses surged 33.67 per cent in June, higher than 22.84 per cent rise in May. Prices of some key vegetables like Onion and Potatoes have started to firm up on a monthly basis.
In June last year, WPI inflation was 5.66 per cent. The WPI inflation for April 2015 has now been revised to (-) 2.43 percent as against (-) 2.65 percent estimated earlier.
The positive impact of Iranian nuclear deal (announced on Tuesday) and the poor WPI reading notwithstanding, there is low probability of the Reserve Bank of India (RBI) cutting policy rate on August 4, say economy watchers.
The central bank - which has cut policy rates thrice this year to the tune of 75 basis points - is widely expected to “wait and watch” in August so as to get good handle of monsoon performance in terms of quantum and distribution, they said.
It is widely believed that the ongoing downward correction in commodity prices will open up space for some monetary easing in September.
RBI is now more guided by the movements in consumer price inflation (CPI), which came in at higher than anticipated level of 5.4 per cent for June on Monday. This CPI print has already dampened expectations of another RBI rate cut on August 4.
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