Th food articles index was up 2.6 per cent, month on month, while the primary articles index was up 2 per cent. Food inflation was at the lowest level since Jan 2012.
Manufactured products inflation also showed a decline to 3.45 per cent vs 3.67 per cent, month on month.
Today's sharp decline in inflation raises the prospects of the Reserve Bank of India cutting interest rates going forward. Crude oil prices have also cooled-off, which should further ease inflation in the coming months.
The RBI has maintained a hawkish tone in the past with regards to inflation and today's WPI inflation figures should once again re-ignite hopes of a interest rate cut.