India inflation eases

AFP, NEW DELHI: India’s two main inflation indices eased further on yesterday, according to government data, hiking prospects of an interest rate cut later this month.  
Retail inflation—the central bank’s benchmark—eased to 3.66 per cent in August against 7.03 per cent last year, and from a revised 3.69 per cent in July, thanks to falling rates of vegetables and fruits.
It fell nearly in line with the 3.57 per cent predicted by a Bloomberg survey.
The Wholesale Price Index (WPI), an inflation indicator that measures the biggest basket of goods, fell 4.95 per cent last month compared with a year earlier, after slipping 4.05 per cent in July, the commerce ministry said.
A separate Bloomberg survey of 32 economists had predicted the index would slump 4.4 per cent.
With prices at record lows, expectations are skyrocketing that the Reserve Bank of India (RBI) may slash borrowing costs in its next policy review on September 29 to boost economic growth.
“Wholesale price inflation has now been in negative territory for ten consecutive months, and is at its lowest since monthly prices started being tracked in 2005,” Capital Economics analyst Shilan Shah said.
“This strengthens our view that interest rates will be cut at the RBI’s policy meeting later this month.”

India inflation eases

AFP, NEW DELHI: Indias two main inflation indices eased further on yesterday, according to government data, hiking prospects of an interest rate cut later this month. Retail inflationthe central banks benchmarkeased to 3.66 per cent in August against 7.03 per cent last year, and from a revised 3.69 per cent in July, thanks to falling rates of vegetables and fruits. It fell nearly in line with the 3.57 per cent predicted by a Bloomberg survey. The Wholesale Price Index (WPI), an inflation indicator that measures the biggest basket of goods, fell 4.95 per cent last month compared with a year earlier, after slipping 4.05 per cent in July, the commerce ministry said. A separate Bloomberg survey of 32 economists had predicted the index would slump 4.4 per cent. With prices at record lows, expectations are skyrocketing that the Reserve Bank of India (RBI) may slash borrowing costs in its next policy review on September 29 to boost economic growth. Wholesale price inflation has now been in negative territory for ten consecutive months, and is at its lowest since monthly prices started being tracked in 2005, Capital Economics analyst Shilan Shah said. This strengthens our view that interest rates will be cut at the RBIs policy meeting later this month.