Inflation eases, but RBI may not go for aggressive rate cuts: Economists

A softer inflation print in February is unlikely to prompt the Reserve Bank of India’s (RBI’s) rate-setting body to opt for deeper cuts, especially when system liquidity remains in deficit and the full transmission of the 25-basis-point (bp) rate cut in February is yet to take place, economists said. 

India’s headline CPI inflation eased to 3.61 per cent in February — the lowest since July 2024 — on the back of a sharp decline in food inflation, mostly due to lower vegetable prices. In January, headline inflation stood at 4.3 per cent. According to UBS Securities, headline CPI inflation is