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India, New Delhi, November 13: In its recent analysis, SBI Research said the Reserve Bank of India (RBI) would not decrease interest rates in February owing to persistent inflation, although inflation is predicted to ease in January.

For financial year 2025, inflation is expected to average 4.8 percent to 4.9 percent, over the RBI goal of 4.5 percent.

It adds that base factors will sustain inflation’s January easing rather than a big price pressure cooling.

“Base effects will bring inflation down from January forward. We increasingly doubt a February rate drop. The initial rate drop is now likely delayed beyond Feb. 25, the paper said.

On Tuesday, the Ministry of Statistics and Programme Implementation reported 10.87 percent food inflation. The vegetable inflation rate was 42.18 percent.

Rural inflation was 6.68 percent and urban inflation 5.62 percent.

Several significant states have above-average inflation, according to the report.

In October, India’s retail inflation reached 6.21 percent, above the Reserve Bank of India’s 6 percent limit.

October inflation was 8.8% in Chhattisgarh, 7.9% in Bihar, and 7.5 percent in Odisha.

“7 states have annual inflation above 2%. The research says that food costs have been rising.

Rural families had 1.07 percent greater inflation than urban households, according to SBI Research.

This is due to higher food costs and a heavier rural food basket (54.2%) than an urban one (36.3%).

In November, vegetable prices should moderate.

Retail pricing data through November 11 shows vegetable prices falling. The analysis notes that CPI headline inflation peaked in Oct’24 but might rise beyond 5% in November and December.

The paper says that currency market volatility and rising inflation may provide the RBI an excuse to delay a rate-easing cycle.

“With the currency market being subject to turbulence, we believe a higher inflation number could act as a blessing in disguise for RBI not to signal a rate-easing cycle,” the study said.