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Inflation hits 41-month low in April at 4.89 per cent
May 14, 2013
(Reuters): India's headline inflation fell below 5 per cent in
April, putting it back in the Reserve Bank's comfort zone for the
first time in more than three years and fuelling market hopes for
more monetary easing to revive
the economy's pedestrian growth rate. April's reading of 4.89 per
cent was the lowest since November 2009 and well below the 5.50 per
cent estimated by analysts in a Reuters poll. The wholesale price
index, India's main inflation measure, rose an annual 5.96 per cent
in March.
The number sparked gains in bond markets, which had
already rallied since last week on expectations that easing
inflation would lead the RBI to cut interest rates further. "It
is a frenzy. The market is pricing in a rate cut," said Ashish
Vaidya, head of treasury at UBS in Mumbai. Inflation was mainly
cooled by a moderation in food and fuel costs along with ebbing
demand-driven price pressures. Food inflation dropped to 6.08
per cent in April from 8.73 per cent a month ago. Fuel prices rose
8.84 per cent on the year compared with an annual rise of 10.18 per
cent in March.
Non-food manufacturing inflation, which the central
bank monitors to gauge demand-driven price pressures, slowed to 2.77
per cent in April from 3.5 per cent a month ago. "With food
prices expected to remain stable, manufacturing prices weak due to
slow growth and commodity prices stable, inflation is expected to be
on a broad downtrend for the next six months and this, we believe,
opens up room for more rate cuts," said Rahul Bajoria, Regional
Economist at Barclays Capital in Singapore. "We think there is
a possibility of as much as 75 basis points more rate cuts in the
next six months, including 25 basis points in the next policy in
June." . Source: Reuters
Retail inflation rises to 10.91% in February
NEW DELHI, March 13, 2013: Retail inflation moved up for
the fifth consecutive month to 10.91 per cent in February -- remaining
in the double-digit terrain for third month in a row -- on account of
higher prices of vegetables, edible oil, cereals and protein-based items.
It was 10.79 per cent in January. The inflation crossed the doubled digit mark in December at 10.56 per cent, against 9.90 per cent in November.
The vegetables basket in February recorded the highest inflation of
21.29 per cent among all the constituents that make the Consumer Price
Index (CPI), according to data released today. That was followed by cereals wherein inflation was 17.04 per cent. Egg,
meat and fish became costlier by 15.72 per cent during the month. Inflation in oils and fats segment stood at 14.56 per cent.
Besides, pulses became dearer by 12.39 per cent and sugar turned more
expensive by 12.10 per cent on an annual basis. Clothing and footwear witnessed 10.87 per cent increase in prices during
the month.
In urban areas, retail inflation rose to 10.84 per cent in February from
10.73 per cent in the previous month. The CPI for rural population increased to 11.01 per cent during the month from 10.88 per cent in January.
The data for wholesale price index (WPI)-based inflation is expected on
Thursday. The WPI figures for January stood at 6.62 per cent, much higher than RBI's comfort level of 5-6 per cent. Source: The Times of India |
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