NEW DELHI - India's annual retail inflation for March eased below the central bank's upper tolerance level for the first time this year, as food prices softened.
Annual retail inflation eased to 5.66% in March from 6.44% in the previous month, government data showed on Wednesday. The bank targets a range of 2%-6%.
A Reuters poll of 39 economists had forecast an annual inflation rate of 5.80% in March.
Food inflation, which accounts for nearly half of the overall consumer price basket, moderated to 4.79% as vegetable prices eased, offsetting surging cereal prices.
Last week, The Reserve Bank of India (RBI) surprised markets by holding its key repo rate steady after six consecutive hikes, saying action over the past 12 months is still playing out and would increasingly weigh on the future inflation trajectory.
RBI's sudden pause came even as retail inflation has remained above the central bank's mandated target range for 10 out of the 13 readings.
However, India Meteorological Department's Tuesday forecast of normal monsoon rains in 2023 cheered policy makers as agricultural activities in the country are heavily dependent on seasonal rains that begin from June.
(Reporting by Nikunj Ohri and Aftab Ahmed; Editing by Andrew Heavens and Peter Graff)