Inflation remained unchanged at 4.27% during the week ended July 7, as steep fall in prices of some essential items like fruits neutralised the impact of other articles becoming dearer.
The stable inflation rate is likely to ease pressure on the Reserve Bank to further tighten monetary policy during its review on July 31.
Analysts feel the central bank is unlikely to further tighten money supply as inflation is within its expectations. RBI has targeted inflation to remain close to 5% this fiscal and 4-4.5% in the medium term.
Weekly data on wholesale price based inflation would come once more on July 27 before the central bank releases its quarterly review of monetary policy.
Finance minister P Chidambaram had also said on Thursday that high crude oil and food prices did not necessarily mean that monetary policy would be tightened further.
?We will keep a watch on food and commodity prices and monetary policy will be kept tight. It does not mean that monetary policy would be tighter,? he was quoted as saying in an interview. Vegetable prices continued to rise after rains across the country disrupted their supply. vegetables became costlier by 4.4% during the week under consideration.But fruits more than moderated the effect of vegetable prices as their prices fell steeply by over 16%.