India Inflation at 13-Month Low, Rate Cut More Likely
Originally posted on Bloomberg
India’s inflation slowed to a 13- month low, increasing chances the central bank may cut interest rates to support a weakening economy. Bonds rose.
Wholesale prices climbed 3.92 percent in the first week of February from a year earlier after gaining 4.39 percent the previous week, the commerce ministry said in New Delhi today. Economists expected an increase of 4.01 percent.
Reserve Bank of India Governor Duvvuri Subbarao yesterday said there was “certainly room” to reduce borrowing costs as the impact of the global recession on Asia’s third-largest economy had been “much sharper” than expected. Inflation has eased from a 16-year high of 12.91 percent in August on lower commodity and energy prices.
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