India Inflation Eases To 13-Month Low,Rate Cut Likely
2009年2月20日
India's inflation rate eased to a 13-month low in the week ended Feb. 7 on sliding prices of cotton and leather, leaving more room for the central bank to cut rates and revive growth in Asia's third-largest economy.
Inflation, as measured by the Wholesale Price Index, slowed to 3.92% from 4.39% in the previous week, showed data issued Thursday by the Ministry of Commerce and Industry.
This is the fourth straight week of slowing inflation.
The reading was below the median 3.99% forecast in a Dow Jones Newswires poll of five economists.
India's inflation rate has now shrunk to a third of the more than 13-year highs in the middle of 2008 as the global economy slows and commodity prices tumble.
Analysts said the pace of the rise in wholesale prices could slow further.
'We expect the headline inflation rate to ease to below 2% by March end as prices of manufactured products continue to soften,' said Manoranjan Sharma, chief economist at Canara Bank.
Government bonds didn't react to inflation data as the market had mostly priced in a sharp fall in the rate.
India's economy, the third-largest in Asia, may grow at 7.1% in the current financial year ending March 31, slowing from a 9% expansion last year.
'A 25-50 basis point cut in key policy rates looks a certainty. It should happen by end-February,' said Raja Bandopadhyay, manager of institutional debt at Debtonnet.com.
Earlier Thursday, a senior finance ministry official told Dow Jones Newswires the ministry favors up to a 100 basis point cut in cash reserve ratio and up to 50 basis point reductions in both repurchase and reverse repurchase rates.
Since early October, the central bank has cut its key lending rate, the repurchase rate, by 350 basis points and the cash reserve ratio, or the proportion of deposits banks must set aside as cash, by 400 basis points.
The reverse repurchase rate, or the key borrowing rate, has been lowered by 200 basis points over the same period.
-By Abhrajit Gangopadhyay |
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