Wholesale inflation fell for the fifth straight month to -2.33 per cent in March, slipping further from the -2.06 per cent in February, aided by a decline in prices of manufactured products.
Prices of manufactured products fell -0.19 per cent in March against 0.33 per cent in February. Also, helping inflation to fall further, fuel and power prices fell -12.56 per cent in March against -14.72 per cent in February.
Food inflation also fell to 6.31 per cent in March against 7.74 per cent in February.
The March inflation data was lower than a -1.95 per cent year-on-year fall forecast by economists in a Reuters poll. The reading for January wholesale price inflation was revised to -0.95 per cent from -0.39 per cent earlier.
The slide in wholesale inflation comes in the wake of consumer price inflation also slowing to a three-month low in March, raising the prospects of a rate cut by the Reserve Bank of India at its June policy review.
Consumer inflation data, released on Monday, showed that it cooled to a three-month low of 5.17 per cent, compared to 5.37 per cent in February, government data showed on Monday.
Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services, said that the slide in March consumer inflation number opens up the possibility of a 0.25 per cent cut in RBI repo rate.
The Reserve Bank of India tracks in consumer inflation data in setting lending rates.
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