Headline Inflation dips in December 2012

The headline inflation dropped to 7.18 per cent in December 2012 from 7.24 per cent in November.

There are speculations of cut in the interest rates by the Reserve Bank of India, which will review its credit policy on January 29th.

The repo rate has been remaining at 8 per cent since April 2011, due to the high inflation rate in India. The cut in the repo rate could help the economy to recover from the slowdown.

The moderation in the price of fuel and manufactured goods were the major causes those helped to keep the inflation to three years lowest figures.

However, the possible reduction in diesel subsidies and hike in the railway fairs could up the inflation figures for the month of January 2013.