Even soaring onion prices may not stop RBI from delivering more rate cuts

Onions have a weight of 0.6 per cent in the overall inflation basket and contribute about 10 per cent to the vegetable basket

A more than 200 per cent surge in onion prices is expected to push India’s headline inflation rate to its highest level in more than a year, but is unlikely to keep Asia’s most aggressive rate cutter from further easing monetary policy.

The price-spike is likely to add at least 30 basis points to September’s headline inflation. A Bloomberg survey ahead of a report due later Monday showed consumer prices probably rose 3.8 per cent in September from a year ago -- the highest since July 2018.

Prices of onions, as well as tomatoes, soared in September after heavy monsoon rains damaged