Finance Minister P Chidambaram said on Thursday food inflation is still high and expressed confidence that it will come down with the full harvest of rabi crops.
"Food inflation is still elevated but we hope that it will come down further as full Rabi crops arrive in the market," he said addressing an Indian Banks' Association's meeting in Mumbai.
The Wholesale Price Index and core inflation have fallen substantially, Chidambaram said.
"Consumer Price Index inflation has
also shown moderation, yet it is still elevated," he added.
Food inflation in April stood at 6.08 per cent, while the overall WPI inflation fell to a three-year low of 4.89 per cent.
However, retail or consumer price index inflation is at 9.39 per cent in April.
He further said as CPI inflation and deposit rates fall, commercial banks should translate monetary policy to retail borrowers and firms through lower lending rates.
Chidambaram highlighted that while the RBI has already cut the repo rate by 125 basis points since early 2012, the commercial banks have cut rates by only 30 basis points.
