Feb 12 (Reuters) - India's key inflation rate accelerated to 2.75% in January on higher food and precious metal prices, the maiden print under a revised data series showed on Thursday, returning to the central bank's target band for the first time since August.
A Reuters poll had projected retail inflation at 2.4%.
The new data series lowers the weighting of key components such as food, while moving the base year to 2024 from 2012.
COMMENTARY:
SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO,
MUMBAI
"The overall number is in line with expectations. The retail inflation measure is now more accurate, more relevant and useful for policy purposes."
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The CPI inflation came in line with expectations. While details are still awaited, the core inflation looks significantly lower than our expectations."
"While inflation trajectory remains fairly benign, we believe the RBI's rate-cutting cycle has come to an end, with the RBI likely to continue to hold rates on pause for an extended period through CY26 at least."
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
"There were a few unknowns in the revised series, especially the impact of methodological changes on the headline."
"The revised inflation series carried a modest upside bias compared to the older base, with firmer food likely to have offset by a more subdued read on core inflation."
"Precious metals remained apace under the new series as well. We don't expect the refreshed inflation trend to meaningfully influence policy decisions in the near term, with an extended rate pause likely, supported by a positive cyclical upswing and confidence effects stemming from the successful conclusion of the U.S.-India trade negotiations."
MADHAVI ARORA, CHIEF ECONOMIST, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI
"We do not expect the new inflation series to materially influence policy in the near term. An extended rate pause looks likely, underpinned by a cyclical upturn in both growth and inflation and improving confidence following the conclusion of the U.S.–India trade negotiations."
(Reporting by Nishit Navin, Kashish Tandon, Meenakshi Maidas in Bengaluru; Compiled by Abinaya Vijayaraghavan, Editing by Eileen Soreng)
