India's consumer price inflation remains high but if the impact of food prices is removed it is at 8 percent, the Reserve Bank of India Governor Duvvuri Subbarao said on Tuesday.
India's annual consumer price inflation accelerated to 10.56 percent in December from the previous month. Food items contribute 49.71 percent to the index.
Analysts have been worried about the central bank's ability to cut rates given high consumer price inflation even as wholesale price based inflation eased to a three-year low.
Earlier in the day, the RBI cut the key repo rate for the first time in nine months by 25 basis points, and also lowered bank's cash reserve ratio to 4 percent from 4.25 percent.