India posts negative inflation in May

India's WPI data released on Monday stood at -2.63%, is the lowest for 7th consecutive month. Despite higher prices of pulses, the food inflation was low, at 3.8%. Fuel price reduced to 10.5% and manufacturing prices dropped by 0.6 percent. 

Core WPI is moderate, fell to -0.65%y/y in May from -0.4% in April. Negative WPI inflation may continue until Q3 15, says Barclays.

Early this month RBI cut repo rate to 7.25%, and revised early inflation forecast upto 6% from 5.8%, notes Barclays.  The monetary policy action in the coming months is expected to continue to be data-dependent.