Food inflation eases to 16.22%

India's food prices eased for the third straight week in mid-March while fuel inflation remained steady, but the central bank is still seen raising rates the second time in as many months in April. The central bank surprised markets with a 25 basis point hike in its key lending rate last week to tame headline inflation that is near 10% and warned of a build up in demand-side pressures on the economy. Data on Thursday showed the fuel price index rose 12.68% in the year to March 13, flat on the week. The federal government had raised motor fuel prices in late February. The food price index rose an annual 16.22% in the year to March 13th, lower than the previous week's reading of 16.30%. Analysts and policymakers see this trend continuing on a higher base and as supplies of winter-harvested crop reach the market.

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