In­dian WPI falls more than es­ti­mated be­fore RBI's rate re­view

The Pak Banker - - MARKETS/SPORTS -

MUM­BAI: In­dia's whole­sale prices fell more than es­ti­mated ahead of bench­mark con­sumer data due later on Mon­day, as in­vestors as­sess whether cen­tral bank Gov­er­nor Raghu­ram Ra­jan will lower in­ter­est rates af­ter the govern­ment stuck with a plan to nar­row the bud­get deficit. Whole­sale prices de­clined 0.91 per­cent in Fe­bru­ary from a year ear­lier af­ter a 0.90 per­cent de­crease in Jan­uary, the Com­merce Min­istry said in a state­ment on Mon­day. The me­dian of 30 es­ti­mates in a Bloomberg sur­vey of econ­o­mists had pre­dicted a 0.19 per­cent de­cline. A sep­a­rate sur­vey shows con­sumer-price in­fla­tion eas­ing to 5.51 per­cent from 5.69 per­cent. Ra­jan on Satur­day said the cen­tral bank was "com­forted" by Prime Min­is­ter Naren­dra Modi's plan to shrink the bud­get deficit to 3.5 per­cent of GDP while telling re­porters to "wait and see" how that feeds into mon­e­tary pol­icy. He's sched­uled to re­view pol­icy on April 5 as he looks to keep CPI within 5 per­cent by March 2017. Meet­ing In­dia's longer term in­fla­tion tar­gets may be chal­leng­ing as back-to-back years of drought erode har­vests and pres­sure Modi to com­pen­sate farm­ers.

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