The February wholesale price inflation (WPI) figure has dropped to 4.68% from 5.05% in January. It is much below the consensus estimate of 4.9% and just 10 basis points higher than May 2013 figure when it was 4.58%. In other words, the February WPI inflation is at a nine-month low. One basis point is one-hundredth of a percentage point.

At the time of writing this, I have not calculated the so-called core inflation or non-food, non-oil manufacturing inflation figure. It is expected to come down, but this will not have any bearing on the Reserve Bank of India’s (RBI’s) monetary policy. For the Indian central bank, the wholesale price inflation is irrelevant, even though officially it may not admit it.

RBI’s focus is on the consumer price inflation, or CPI, which gives a better sense of price movement as it reflects the retail inflation. Indeed, the contribution of food items is far greater in CPI than in WPI, but this should not come in the way of tracking CPI for formulating monetary policy as RBI and the government work in close coordination. Food has about 48% weightage in CPI versus 23% in WPI.

Driven by vegetable prices, the February CPI at 8.1% was below the consensus estimate of 8.3% and about 70 basis points less than its January figure. At 8.1%, the February CPI was also the lowest since January 2012 when it was 7.65%. The core CPI in February, too, dropped 20 basis points, from 8.2% to 8%.

That made many believe that RBI may go for a rate cut in April when it meets for its first bimonthly monetary policy for fiscal 2015. This is highly unlikely to happen for two reasons.

First, at 8.1%, the CPI has probably bottomed out as food prices will start rising in March and from now onwards, the consumer price inflation is likely to start inching up. Similarly, the 4.68% February WPI figure is also probably the lowest level in recent times and it may start moving up from March.

Second, the Urjit Patel committee’s recommendations—which RBI has closely been following—have envisaged 8% consumer price inflation in January 2015 and 6% in January 2016. If RBI starts cutting rate when consumer price inflation inches down towards 8% or even drops below 8%, how will it come down to 6% by January 2016?

So, RBI will definitely refrain from any rate cut in April. On the contrary, we may see some rate tightening in the following months, if CPI as well as WPI start moving up in the second half of the curre