Retail Inflation has come down closer to the RBI’s mid-term target of 4 per cent after which the central bank would be in a position to cut key interest rates to spur economic growth.

The country’s CPI inflation had stood at 5.09 per cent in February and 5.1 per cent in January.

The declining trend in cooking oil prices continued in March with a 11.72 per cent fall during the month. The price rise in spices slowed to 11.4 per cent in March from 13.28 per cent in February.

The inflation in pulses also slowed to 17.71 per cent during the month compared to 20.47 per cent in January.

However, the data shows that vegetable prices shot up by as much as 28.34 per cent in March which remains a pain point for consumers. The prices of cereals also increased by 8.37 per cent during the month.

The consumer price inflation is still above the RBI’s mid-term target of 4 per cent and is the main reason why the central bank has not gone in for a cut in interest rates to rev up growth.

The RBI is keen to keep inflation under control to ensure stability and has held the repo rate steady at 6.5 per cent for seven consecutive times in a row in its bi-monthly monetary policy reviews.

The RBI stated in its monetary policy review on April 5 that it expects inflation to come down to 4.5 per cent in 2024-25, assuming a normal monsoon this year.

Going forward, the inflation trajectory will be shaped by the evolving food inflation outlook. Rabi sowing has surpassed last year’s level. The usual seasonal correction in vegetable prices is continuing, though unevenly, the RBI said.