India&#39;s annual wholesale price inflation eased in January for the second straight month after touching an eight-month high in November, helped by a softer rise in food and fuel prices, government data showed on Thursday.

Annual wholesale price inflation last month slowed to 2.84 percent from a year earlier, from a provisional 3.58 percent rise in December.

Wholesale food prices in January rose 1.65 percent year-on-year, compared with a 2.91 percent rise a month earlier, the data showed.

Wholesale food prices in January rose 1.65 percent year-on-year, compared with a 2.91 percent rise a month earlier, the data showed.

India's annual wholesale price inflation eased in January for the second straight month after touching an eight-month high in November, helped by a softer rise in food and fuel prices, government data showed on Thursday. Annual wholesale price inflation last month slowed to 2.84 percent from a year earlier, from a provisional 3.58 percent rise in December. Wholesale food prices in January rose 1.65 percent year-on-year, compared with a 2.91 percent rise a month earlier, the data showed.

Inflation falls in January on softer food, fuel prices

Inflation based on wholesale prices eased to 3.58 per cent in December 2017 as prices of food articles declined even as fuel cost witnessed a surge.&nbsp;

Calculated on the basis of Wholesale Price Index (WPI), the inflation was 3.93 per cent in November 2017 and 2.10 per cent in December 2016.&nbsp;

As per government data released today, inflation on food articles slowed to 4.72 per cent in December, from 6.06 per cent in November 2017.&nbsp;

Vegetables too witnessed some softening with annual inflation at 56.46 per cent in December as against 59.80 per cent in the previous month. Kitchen staple onion witnessed a whopping 197.05 per cent price rise in December.&nbsp;

Inflation in protein-rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent.&nbsp;

In the fuel and power segment, wholesale inflation rose to 9.16 per cent in December, while it was 2.61 per cent for manufactured items.&nbsp;

Data released last week showed that retail inflation breached the RBI&#39;s comfort level to touch 5.21 per cent in December on rise in prices of food items, especially vegetables.&nbsp;

The Reserve Bank takes into account retail inflation while deciding on key policy rates.&nbsp;

In its last policy review in December, the RBI had kept key interest rate unchanged. It raised inflation forecast for the remainder of the current financial year to 4.3-4.7 per cent, on account of global crude oil prices and implementation of the 7th Pay Commission recommendations.&nbsp;

Meanwhile, inflation for October has been revised upwards to 3.68 per cent from the provisional estimate of 3.59 per cent released earlier.&nbsp;

Inflation in protein rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent

Inflation based on wholesale prices eased to 3.58 per cent in December 2017 as prices of food articles declined even as fuel cost witnessed a surge. Calculated on the basis of Wholesale Price Index (WPI), the inflation was 3.93 per cent in November 2017 and 2.10 per cent in December 2016. As per government data released today, inflation on food articles slowed to 4.72 per cent in December, from 6.06 per cent in November 2017. Vegetables too witnessed some softening with annual inflation at 56.46 per cent in December as against 59.80 per cent in the previous month. Kitchen staple onion witnessed a whopping 197.05 per cent price rise in December. Inflation in protein-rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent. In the fuel and power segment, wholesale inflation rose to 9.16 per cent in December, while it was 2.61 per cent for manufactured items. Data released last week showed that retail inflation breached the RBI's comfort level to touch 5.21 per cent in December on rise in prices of food items, especially vegetables. The Reserve Bank takes into account retail inflation while deciding on key policy rates. In its last policy review in December, the RBI had kept key interest rate unchanged. It raised inflation forecast for the remainder of the current financial year to 4.3-4.7 per cent, on account of global crude oil prices and implementation of the 7th Pay Commission recommendations. Meanwhile, inflation for October has been revised upwards to 3.68 per cent from the provisional estimate of 3.59 per cent released earlier.

WPI inflation eases to 3.58% in December as veggies price decline

The annual retail inflation accelerated in December to a 17-month high of 5.21 per cent, government data showed on Friday, mainly driven by faster rises in prices of food and fuel products.

Analysts polled by Reuters had forecast December&#39;s CPI inflation to rise to 5.10 per cent from November&#39;s 4.88 per cent.

In December, the Reserve Bank of India held its policy rate and reiterated a neutral stance but said that &quot;all possibilities are on the table&quot; depending on how price pressures and growth pan out.

For the six months through March, the RBI slightly raised its inflation projection - already above its 4 percent medium-term target - to 4.3-4.7 per cent.

Factors that indicate higher December inflation are increased prices for some foods and the impact of higher pay for government employees.

The annual retail inflation accelerated in December to a 17-month high of 5.21 per cent, government data showed on Friday, mainly driven by faster rises in prices of food and fuel products. Analysts polled by Reuters had forecast December's CPI inflation to rise to 5.10 per cent from November's 4.88 per cent. In December, the Reserve Bank of India held its policy rate and reiterated a neutral stance but said that "all possibilities are on the table" depending on how price pressures and growth pan out. For the six months through March, the RBI slightly raised its inflation projection - already above its 4 percent medium-term target - to 4.3-4.7 per cent.

December retail inflation hits 17-month high of 5.21 per cent

India&#39;s wholesale price based inflation rose&nbsp;to 3.93 per cent in&nbsp;November, as against 3.59 per cent in October.

&nbsp;The annual wholesale price inflation accelerated in November to an eight-month high, driven by faster rises in prices of food and fuel products, government data showed.&nbsp;

Inflation, based on the Wholesale Price Index (WPI), had risen to a six-month high in October due to increase in prices of food, onions and vegetables.

The government data had shown&nbsp;inflation in food articles more than doubled to 4.30 per cent in October.

In April, India&#39;s inflation stood at 3.85 per cent.

Last month, the Reserve Bank of India(RBI) had kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal.

RBI also raised its inflation forecast to the 4.2-4.6 per cent range for the rest of the current fiscal as against 4-4.5 per cent previously.&nbsp; 
&nbsp;

The government data had shown?inflation in food articles more than doubled to 4.30 per cent in October.

India's wholesale price based inflation rose to 3.93 per cent in November, as against 3.59 per cent in October. The annual wholesale price inflation accelerated in November to an eight-month high, driven by faster rises in prices of food and fuel products, government data showed. Inflation, based on the Wholesale Price Index (WPI), had risen to a six-month high in October due to increase in prices of food, onions and vegetables. The government data had shown inflation in food articles more than doubled to 4.30 per cent in October. In April, India's inflation stood at 3.85 per cent. Last month, the Reserve Bank of India(RBI) had kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal. RBI also raised its inflation forecast to the 4.2-4.6 per cent range for the rest of the current fiscal as against 4-4.5 per cent previously.

India's wholesale inflation rises to eight-month high in November

The stock market set the clock back today as the Sensex tumbled 228 points -- in a break with three sessions of gains -- after investor worry heightened over rising global oil prices ahead of inflation numbers.

Participants were at a crossroads as they had a clutch of macro pointers such as industrial production (IIP) and inflation in their sights, slated for release after market hours. Other Asian shares turned weak.

The Sensex closed at 33,227.99, down 227.80 points, or 0.68 per cent. The gauge had rallied 858.61 points in the previous three sessions.

The broader Nifty settled below the key 10,300-level, down 82.10 points, or 0.80 per cent, at 10,240.15.

&quot;With few cues to push ahead, the caution ahead of key macroeconomic release weighed on prices. Asian peers also offered little support with dollar&#39;s firmness ahead of key major central banks&#39; meetings. With pre-Budget talks under way, markets are also weighing the likelihood of the government levying taxes on long-term capital gains,&quot; said Anand James, Chief Market Strategist, Geojit Financial Services.

Realty, power and banking were in the grip of selling.

Global Brent crude oil prices jumped above the USD 65 a barrel for the first time since 2015, which could spoil any chance of rate reduction by the Reserve Bank, traders said.

Losses in oil marketers such as HPCL, BPCL and IOC stocks too weighed.

The Federal Reserve, which is scheduled to issue an interest rate policy update on Wednesday, kicks off its meeting. It is expected to lift rates by 0.25 per cent.

Back home, in the Sensex pack, Coal India tanked the most, losing 2.45 per cent, followed by Cipla, down 2.17 per cent, after participants took profit off the table.

Other major losers were Hero MotoCorp, TCS, Tata Steel, ITC and L&amp;T.

Dr Reddy&#39;s took a different trajectory, advancing the most by 2.83 per cent after the company said it has received Establishment Inspection Report (EIR) from the USFDA for its Hyderabad facility.

Adani Ports, ONGC, Lupin, Infosys, SBI and Maruti Suzuki too rose.

On the sectoral front, telecom fell by the widest margin of 2.12 per cent. Realty, power and FMCG lost too.

A weak trend also extended to the broader markets, with BSE mid-cap and small-cap indices retreating up to 1.01 per cent.

Foreign portfolio investors (FPIs) turned net sellers, diluting shares net Rs 185.60 crore yesterday while domestic institutional investors (DIIs) bought equities to the tune of Rs 108.94 crore, as per provisional data. PTI

The broader Nifty settled below the key 10,300 level, down 82.10 points, or 0.80%, at 10,240.15

The stock market set the clock back today as the Sensex tumbled 228 points -- in a break with three sessions of gains -- after investor worry heightened over rising global oil prices ahead of inflation numbers. Participants were at a crossroads as they had a clutch of macro pointers such as industrial production (IIP) and inflation in their sights, slated for release after market hours. Other Asian shares turned weak. The Sensex closed at 33,227.99, down 227.80 points, or 0.68 per cent. The gauge had rallied 858.61 points in the previous three sessions. The broader Nifty settled below the key 10,300-level, down 82.10 points, or 0.80 per cent, at 10,240.15. "With few cues to push ahead, the caution ahead of key macroeconomic release weighed on prices. Asian peers also offered little support with dollar's firmness ahead of key major central banks' meetings. With pre-Budget talks under way, markets are also weighing the likelihood of the government levying taxes on long-term capital gains," said Anand James, Chief Market Strategist, Geojit Financial Services. Realty, power and banking were in the grip of selling. Global Brent crude oil prices jumped above the USD 65 a barrel for the first time since 2015, which could spoil any chance of rate reduction by the Reserve Bank, traders said. Losses in oil marketers such as HPCL, BPCL and IOC stocks too weighed. The Federal Reserve, which is scheduled to issue an interest rate policy update on Wednesday, kicks off its meeting. It is expected to lift rates by 0.25 per cent. Back home, in the Sensex pack, Coal India tanked the most, losing 2.45 per cent, followed by Cipla, down 2.17 per cent, after participants took profit off the table. Other major losers were Hero MotoCorp, TCS, Tata Steel, ITC and L&T. Dr Reddy's took a different trajectory, advancing the most by 2.83 per cent after the company said it has received Establishment Inspection Report (EIR) from the USFDA for its Hyderabad facility. Adani Ports, ONGC, Lupin, Infosys, SBI and Maruti Suzuki too rose. On the sectoral front, telecom fell by the widest margin of 2.12 per cent. Realty, power and FMCG lost too. A weak trend also extended to the broader markets, with BSE mid-cap and small-cap indices retreating up to 1.01 per cent. Foreign portfolio investors (FPIs) turned net sellers, diluting shares net Rs 185.60 crore yesterday while domestic institutional investors (DIIs) bought equities to the tune of Rs 108.94 crore, as per provisional data. PTI

Caution on inflation puts stocks to test, Sensex slides 228 points

<a href="http://www.wionews.com/business-economy/consumer-inflation-soars-to-488-while-industrial-output-growth-slows-to-22-26549" target="_blank">Retail inflation hits 15-month high of 4.88% in November</a>

Fuelled by soaring food prices, retail inflation climbed to a 15-month high of 4.88% in November. It was at 3.58 % in October.

Industrial output growth meanwhile slowed to 2.2% in October from 3.8% in September, with demand continuing to suffer from the disruption caused by the rollout of the new Goods and Services Tax (GST). &nbsp;

<a href="http://www.wionews.com/india-news/government-to-set-special-courts-for-speedy-trial-of-mps-mlas-pending-cases-26535">Centre to SC: Will set up 12 special courts to decide criminal cases pending against MPs, MLAs</a>

The Centre has told the Supreme Court, in an affidavit filed by the law minister, that it will set up 12 special courts to decide criminal cases pending against MPs and MLA.&nbsp;

<a href="http://www.wionews.com/india-news/tami-nadu-honour-killing-six-of-the-convicts-get-death-sentence-including-father-in-law-26538">Tamil Nadu </a><a href="http://www.wionews.com/india-news/tami-nadu-honour-killing-six-of-the-convicts-get-death-sentence-including-father-in-law-26538">honour</a><a href="http://www.wionews.com/india-news/tami-nadu-honour-killing-six-of-the-convicts-get-death-sentence-including-father-in-law-26538"> killing: 6 sentenced to death including father-in-law</a>

A Tirupur court in Tamil Nadu convicted 11 people on Tuesday for the murder of Dalit youth V Shankar, six of the convicts were given death sentences.

One was sentenced to life imprisonment.

The convicts who were given death sentences included Shankar&#39;s father-in-law.&nbsp;

<a href="http://www.wionews.com/india-news/bjp-demands-mlas-to-step-down-for-organising-kissing-competition-26537">Jharkhand kissing competition: Organising MLAs asked to step down</a>

The BJP has come down hard on the Jharkhand Mukti Morcha leaders involved in organising the event, demanding an apology and their immediate suspension from the state assembly.

<a href="http://www.wionews.com/business-economy/indias-economy-to-grow-at-72-in-2018-un-26543">India&#39;s economy to grow at 7.2% in 2018: UN</a>

India&#39;s economy is projected to grow at 7.2 per cent in 2018 and 7.4 per cent in 2019, despite a slowdown observed this year and the lingering effects from the demonetisation, the UN has said.

Retail inflation hits 15-month high of 4.88% in November Fuelled by soaring food prices, retail inflation climbed to a 15-month high of 4.88% in November. It was at 3.58 % in October. Industrial output growth meanwhile slowed to 2.2% in October from 3.8% in September, with demand continuing to suffer from the disruption caused by the rollout of the new Goods and Services Tax (GST). Centre to SC: Will set up 12 special courts to decide criminal cases pending against MPs, MLAs The Centre has told the Supreme Court, in an affidavit filed by the law minister, that it will set up 12 special courts to decide criminal cases pending against MPs and MLA. Tamil Nadu honour killing: 6 sentenced to death including father-in-law A Tirupur court in Tamil Nadu convicted 11 people on Tuesday for the murder of Dalit youth V Shankar, six of the convicts were given death sentences. One was sentenced to life imprisonment. The convicts who were given death sentences included Shankar's father-in-law. Jharkhand kissing competition: Organising MLAs asked to step down The BJP has come down hard on the Jharkhand Mukti Morcha leaders involved in organising the event, demanding an apology and their immediate suspension from the state assembly. India's economy to grow at 7.2% in 2018: UN India's economy is projected to grow at 7.2 per cent in 2018 and 7.4 per cent in 2019, despite a slowdown observed this year and the lingering effects from the demonetisation, the UN has said.

WION Evening News Brief, December 12, 2017

The Reserve Bank of India(RBI) today kept the policy rate unchanged at six per cent, deciding to keep the rate &#39;neutral&#39;.

The RBI also kept the reverse repo rate unchanged at 5.75 per cent.

Experts had predicted the RBI would keep the rates unchanged due to high inflation and a strong economic growth which did not require monetary stimulus.

The rate is lowest since November 2010, reports said a five-member committee voted to keep it unchanged with one member voting against it.

The Sensex had slipped during the day ahead of the repo rate announcement as the market expected the Reserve Bank to keep rates at neutral.

The Finance ministry had announced recently India&#39;s growth in the second quarter had risen 6.3 percent in July-Sept period signaling an uptake in economic activity which was one of&nbsp;the reason for RBI to keep the policy rate at six per cent.

The RBI also kept the reverse repo rate unchanged at 5.75 per cent.

The Reserve Bank of India(RBI) today kept the policy rate unchanged at six per cent, deciding to keep the rate 'neutral'. The RBI also kept the reverse repo rate unchanged at 5.75 per cent. Experts had predicted the RBI would keep the rates unchanged due to high inflation and a strong economic growth which did not require monetary stimulus. The rate is lowest since November 2010, reports said a five-member committee voted to keep it unchanged with one member voting against it. The Sensex had slipped during the day ahead of the repo rate announcement as the market expected the Reserve Bank to keep rates at neutral. The Finance ministry had announced recently India's growth in the second quarter had risen 6.3 percent in July-Sept period signaling an uptake in economic activity which was one of the reason for RBI to keep the policy rate at six per cent.

RBI keeps repo rate unchanged at 6 per cent

The Reserve Bank of India (RBI) looks set to keep its policy rate on hold on Wednesday after inflation accelerated to a seven-month high and stronger economic growth reduced the need for monetary stimulus.

All but two of 54 analysts in a Reuters Poll said the repo rate would be left at 6.00 per cent, the lowest since November 2010.

In August, the RBI made its only cut in 2017, of 25 basis points, and in October, it held. On Wednesday, after a two-day meeting, the RBI is likely to reiterate concern about inflation, as the annual rate increased to 3.58 per cent in October. That&rsquo;s low by Indian standards, but not far from the central bank&rsquo;s 4 per cent target.

Another source of RBI discomfort is that core inflation, which excludes food and energy prices, has remained stubbornly high at around 4.5 per cent.

The central bank is likely to reiterate a &ldquo;neutral&rdquo; stance, thus giving itself the flexibility to cut rates in February, even though only seven of the 48 analysts in the Reuters poll who gave a view on 2018&rsquo;s first meeting expect that outcome.

Last week, there was welcome news of a recovery in annual economic growth in July-September to 6.3 per cent, from 5.7 per cent the previous quarter.

&ldquo;The recovery is a source of comfort to the RBI as it lowers pressure on them to take a growth-supportive stance,&rdquo; said Radhika Rao, an economist at DBS in Singapore.

But the latest pace is still well below the 8 per cent level India needs to create millions of jobs each year for youths.

Calls for a Cut

That has sparked renewed calls from some government officials for the RBI, which has cut the repo rate by 200 bps since January 2015, to trim again.

While analysts rule out a cut now, some say the central bank could soften its tone somewhat and sound more accommodative.&nbsp;

&ldquo;We don&rsquo;t expect the tone to be outright hawkish as the RBI might need to trim down its growth projections for FY18, which at current levels is optimistic,&rdquo; said Rao, who expects a hold on Wednesday and in February. &ldquo;But they would still sound cautious on inflation and positive on growth.&rdquo;

The RBI&rsquo;s course will likely be determined by inflation, which in October it projected would accelerate to 4.2 to 4.6 per cent in the six months to March, driven by multiple factors including planned pay hikes for government employees.

The central bank is also likely to be concerned that the government may have a wider fiscal deficit in the fiscal year ending in March than the 3.2 per cent target, raising the prospect New Delhi may have to sell more bonds.

Those fears, plus the prospect they would further reduce the scope to cut rates amid accelerating inflation, have sent benchmark 10-year bonds sharply lower since the RBI cut the repo rate on August 2, with the yield up more than 60 bps.

The uncertainty about India&rsquo;s fiscal management is being further exacerbated as the government is due to unveil its budget for the next fiscal year in early February, before the RBI&rsquo;s next meeting.

The government&rsquo;s prudent fiscal management helped the country earn a much-desired rating upgrade from Moody&rsquo;s Investors Service last month.

Still, some analysts are worried New Delhi could crank up spending next year as it seeks to boost its re-election chances in 2019.

On Wednesday, after a two-day meeting, the RBI is likely to reiterate concern about inflation, as the annual rate increased to 3.58 per cent in October

The Reserve Bank of India (RBI) looks set to keep its policy rate on hold on Wednesday after inflation accelerated to a seven-month high and stronger economic growth reduced the need for monetary stimulus. All but two of 54 analysts in a Reuters Poll said the repo rate would be left at 6.00 per cent, the lowest since November 2010. In August, the RBI made its only cut in 2017, of 25 basis points, and in October, it held. On Wednesday, after a two-day meeting, the RBI is likely to reiterate concern about inflation, as the annual rate increased to 3.58 per cent in October. That’s low by Indian standards, but not far from the central bank’s 4 per cent target. Another source of RBI discomfort is that core inflation, which excludes food and energy prices, has remained stubbornly high at around 4.5 per cent. The central bank is likely to reiterate a “neutral” stance, thus giving itself the flexibility to cut rates in February, even though only seven of the 48 analysts in the Reuters poll who gave a view on 2018’s first meeting expect that outcome. Last week, there was welcome news of a recovery in annual economic growth in July-September to 6.3 per cent, from 5.7 per cent the previous quarter. “The recovery is a source of comfort to the RBI as it lowers pressure on them to take a growth-supportive stance,” said Radhika Rao, an economist at DBS in Singapore. But the latest pace is still well below the 8 per cent level India needs to create millions of jobs each year for youths. Calls for a Cut That has sparked renewed calls from some government officials for the RBI, which has cut the repo rate by 200 bps since January 2015, to trim again. While analysts rule out a cut now, some say the central bank could soften its tone somewhat and sound more accommodative. “We don’t expect the tone to be outright hawkish as the RBI might need to trim down its growth projections for FY18, which at current levels is optimistic,” said Rao, who expects a hold on Wednesday and in February. “But they would still sound cautious on inflation and positive on growth.” The RBI’s course will likely be determined by inflation, which in October it projected would accelerate to 4.2 to 4.6 per cent in the six months to March, driven by multiple factors including planned pay hikes for government employees. The central bank is also likely to be concerned that the government may have a wider fiscal deficit in the fiscal year ending in March than the 3.2 per cent target, raising the prospect New Delhi may have to sell more bonds. Those fears, plus the prospect they would further reduce the scope to cut rates amid accelerating inflation, have sent benchmark 10-year bonds sharply lower since the RBI cut the repo rate on August 2, with the yield up more than 60 bps. The uncertainty about India’s fiscal management is being further exacerbated as the government is due to unveil its budget for the next fiscal year in early February, before the RBI’s next meeting. The government’s prudent fiscal management helped the country earn a much-desired rating upgrade from Moody’s Investors Service last month. Still, some analysts are worried New Delhi could crank up spending next year as it seeks to boost its re-election chances in 2019.

Preview: RBI, wary on inflation, set to keep rates on hold

The Reserve Bank is likely to keep the key rate unchanged on Wednesday and stay focused on inflation control as the rebound in September quarter GDP growth - after a five quarter decline - seemed to have eased pressure on it to lower rates, experts said.

India Inc, however, is demanding interest rate cut to further build on positive sentiment generated by the rebound and upgrade of the country&#39;s sovereign rating by Moody&#39;s.

The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, will meet on December 5 and 6 for the Fifth Bi-monthly Monetary Policy Statement for 2017-18. The resolution of the MPC will be made public on December 6.

In its October review, it had kept the benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal.

The central bank had reduced the benchmark lending rate by 0.25 percentage points to 6 per cent in August, bringing it to a 6-year low.

Bankers and experts are of the view that the RBI for the second time in a row may key repo-rate or short-term lending rate unchanged as inflation trajectory is likely to remain upward in the coming months.

&quot;It&#39;s going to be a status quo. The liquidity in the system is very low, deposit rates are firming up and there are concerns about inflation,&quot; said Union Bank MD and CEO Rajkiran Rai G.

Global financial services major Nomura said while lower GST rates have moderated output prices, input cost pressures are marginally higher, which along with higher food inflation is likely to push retail inflation slightly above the RBI midpoint target of 4 per cent in November and beyond.

&quot;We expect a hawkish hold from the RBI..And policy rates to remain unchanged through 2018,&quot; it said in a report.

Wholesale prices-based inflation had shot up to a 6-month high of 3.59 per cent in October. The retail inflation (Consumer Price Index) for October rose to a 7-month high of 3.58 per cent.

Meanwhile, industry body Ficci said there has been positive news in the form of improvement in ease of doing business rankings, Moody?s upgrade of India&#39;s rating and the massive recapitalisation plan for banks.

&quot;This is a good opportunity to further build the confidence levels. The monetary policy announcement next week will be a perfect timing to give another shot to boost the sentiment,&quot; said Ficci President Pankaj Patel in a statement.

Reversing a five-quarter slide in GDP growth, Indian economy bounced back from a three-year low to expand by 6.3 per cent in the July-September period as manufacturing revved up and businesses adjusted to the new GST tax regime.

The GDP growth in the second quarter of 2017-18 compares to 5.7 per cent in April-June.

Credit rating firm ICRA has said RBI is likely to keep the key policy rate unchanged at 6 per cent as it expects retail inflation to firm up in the coming months.

It said the (MPC) would leave the repo rate unchanged at 6 per cent &quot;in a non-unanimous decision in the December 2017 policy review, given the expectation of a further rise in the CPI inflation in the coming months&quot;.

With gross value added (GVA) growth estimated by the Central Statistics Office at 5.8 per cent in first half of FY&#39;18, a downward bias is likely to be placed on the MPC&#39;s baseline forecast for growth of GVA at basic prices of 6.7 per cent for ongoing fiscal.&nbsp;

The Monetary Policy Committee headed by RBI Governor Urjit Patel will meet on December 5 and 6 for the Fifth Bi-monthly Monetary Policy Statement for 2017-18

The Reserve Bank is likely to keep the key rate unchanged on Wednesday and stay focused on inflation control as the rebound in September quarter GDP growth - after a five quarter decline - seemed to have eased pressure on it to lower rates, experts said. India Inc, however, is demanding interest rate cut to further build on positive sentiment generated by the rebound and upgrade of the country's sovereign rating by Moody's. The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, will meet on December 5 and 6 for the Fifth Bi-monthly Monetary Policy Statement for 2017-18. The resolution of the MPC will be made public on December 6. In its October review, it had kept the benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal. The central bank had reduced the benchmark lending rate by 0.25 percentage points to 6 per cent in August, bringing it to a 6-year low. Bankers and experts are of the view that the RBI for the second time in a row may key repo-rate or short-term lending rate unchanged as inflation trajectory is likely to remain upward in the coming months. "It's going to be a status quo. The liquidity in the system is very low, deposit rates are firming up and there are concerns about inflation," said Union Bank MD and CEO Rajkiran Rai G. Global financial services major Nomura said while lower GST rates have moderated output prices, input cost pressures are marginally higher, which along with higher food inflation is likely to push retail inflation slightly above the RBI midpoint target of 4 per cent in November and beyond. "We expect a hawkish hold from the RBI..And policy rates to remain unchanged through 2018," it said in a report. Wholesale prices-based inflation had shot up to a 6-month high of 3.59 per cent in October. The retail inflation (Consumer Price Index) for October rose to a 7-month high of 3.58 per cent. Meanwhile, industry body Ficci said there has been positive news in the form of improvement in ease of doing business rankings, Moody?s upgrade of India's rating and the massive recapitalisation plan for banks. "This is a good opportunity to further build the confidence levels. The monetary policy announcement next week will be a perfect timing to give another shot to boost the sentiment," said Ficci President Pankaj Patel in a statement. Reversing a five-quarter slide in GDP growth, Indian economy bounced back from a three-year low to expand by 6.3 per cent in the July-September period as manufacturing revved up and businesses adjusted to the new GST tax regime. The GDP growth in the second quarter of 2017-18 compares to 5.7 per cent in April-June. Credit rating firm ICRA has said RBI is likely to keep the key policy rate unchanged at 6 per cent as it expects retail inflation to firm up in the coming months. It said the (MPC) would leave the repo rate unchanged at 6 per cent "in a non-unanimous decision in the December 2017 policy review, given the expectation of a further rise in the CPI inflation in the coming months". With gross value added (GVA) growth estimated by the Central Statistics Office at 5.8 per cent in first half of FY'18, a downward bias is likely to be placed on the MPC's baseline forecast for growth of GVA at basic prices of 6.7 per cent for ongoing fiscal.

RBI likely to keep interest rate on hold for second time in row

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, <a href="http://www.wionews.com/india-news/indias-october-retail-inflation-touches-seven-month-high-of-358-percent-24113">despite expectations that&nbsp;inflation</a> will breach its 4 percent target in the next few months, a Reuters poll showed.

The results, from a poll of economists taken over the past week, also found there is a bigger risk the next move is a cut, even though forecasts diverge in three directions starting from the second quarter of next year.

That suggests both that policymakers have little room for manoeuvre and the outlook for rates beyond the next few months is exceptionally fuzzy, with several respondents saying they were unwilling to look much beyond the turn of the year.

The poll comes at a possible turning point for Asia&#39;s third-largest economy, with a separate Reuters survey showing economists now expect a rebound in economic growth after five consecutive quarters of deceleration.

&quot;In the RBI&#39;s perception,&nbsp;inflation&nbsp;is inching up and the risks of that remaining high remain for a longer duration, say a couple of quarters or so, it may be difficult for the RBI to consider a rate cut around that scenario,&quot; said Shubhada Rao, chief economist at Yes Bank in Mumbai.

&quot;In our opinion, a December rate cut is ruled out. Maybe next year (but) a lot depends on how inflation&nbsp;plays out,&quot; said Rao, who was the most accurate forecaster on the Indian economy in Reuters Polls last year.

The latest survey found 52 of 54 economists expected the RBI to hold the repo rate at 6.0 percent on Dec. 6, with just two forecasting a 25-basis-point cut to 5.75 percent.

The RBI&#39;s Monetary Policy Committee at its meeting in October expressed concern about rising inflation, one of the reasons it decided to keep rates steady then.&nbsp;Inflation&nbsp;rose to 3.6 percent at last count, the highest in seven months.

In the poll, 20 of 26 economists who answered an additional question said&nbsp;inflation&nbsp;was likely to rise above the RBI&#39;s 4 percent medium-term target by March, with forecasts split nearly evenly between the current quarter and early 2018.

But not all economists were concerned about&nbsp;inflation, which is still low by historical standards.

Finance ministry officials told Reuters that India&#39;s government is lobbying for a rate cut.

&quot;We expect the RBI to cut policy rates, if not in December then in its next policy review,&quot; one ministry official told Reuters on condition of anonymity.

Prime Minister Narendra Modi&#39;s government has hit the economy with sweeping changes over the past year by removing more than 85 percent of the currency in circulation as well as implementing a new national goods and services tax.

But if the RBI were to cut rates, it would be out of step with the latest trend among major central banks, which are now looking to either tighten policy or move away from ultra-easy policy in place since the financial crisis a decade ago.

The US&nbsp;Federal Reserve has been raising rates for the last two years, the Bank of Canada has lifted them twice this year and even the Bank of England put up borrowing costs earlier this month, in part on&nbsp;inflation&nbsp;concerns.

The global economy is also fairly strong, with most economies growing simultaneously. Yet at its last policy review, the RBI cut its growth outlook for the current fiscal year to 6.7 percent from 7.3 percent, suggesting it is not close to considering raising rates.

The latest Reuters poll found economists overwhelmingly expected no changes to that domestic outlook at the December policy meeting, further evidence that the repo rate is likely to remain on hold at 6.0 percent then and for a while longer.

Sajjid Chinoy, chief India economist at JP Morgan, wrote in a recent note to clients that the significant rise in oil prices over recent months, which will pinch consumers through higherinflation, is a good reason for pause.

&quot;The resulting jump in&nbsp;inflation, which we now see rising to above 4.5 percent next quarter, is likely to keep the RBI cautious at its December review.&quot;

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, despite expectations that?inflation will breach its 4 percent target in the next few months, a Reuters poll showed

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, despite expectations that inflation will breach its 4 percent target in the next few months, a Reuters poll showed. The results, from a poll of economists taken over the past week, also found there is a bigger risk the next move is a cut, even though forecasts diverge in three directions starting from the second quarter of next year. That suggests both that policymakers have little room for manoeuvre and the outlook for rates beyond the next few months is exceptionally fuzzy, with several respondents saying they were unwilling to look much beyond the turn of the year. The poll comes at a possible turning point for Asia's third-largest economy, with a separate Reuters survey showing economists now expect a rebound in economic growth after five consecutive quarters of deceleration. "In the RBI's perception, inflation is inching up and the risks of that remaining high remain for a longer duration, say a couple of quarters or so, it may be difficult for the RBI to consider a rate cut around that scenario," said Shubhada Rao, chief economist at Yes Bank in Mumbai. "In our opinion, a December rate cut is ruled out. Maybe next year (but) a lot depends on how inflation plays out," said Rao, who was the most accurate forecaster on the Indian economy in Reuters Polls last year. The latest survey found 52 of 54 economists expected the RBI to hold the repo rate at 6.0 percent on Dec. 6, with just two forecasting a 25-basis-point cut to 5.75 percent. The RBI's Monetary Policy Committee at its meeting in October expressed concern about rising inflation, one of the reasons it decided to keep rates steady then. Inflation rose to 3.6 percent at last count, the highest in seven months. In the poll, 20 of 26 economists who answered an additional question said inflation was likely to rise above the RBI's 4 percent medium-term target by March, with forecasts split nearly evenly between the current quarter and early 2018. But not all economists were concerned about inflation, which is still low by historical standards. Finance ministry officials told Reuters that India's government is lobbying for a rate cut. "We expect the RBI to cut policy rates, if not in December then in its next policy review," one ministry official told Reuters on condition of anonymity. Prime Minister Narendra Modi's government has hit the economy with sweeping changes over the past year by removing more than 85 percent of the currency in circulation as well as implementing a new national goods and services tax. But if the RBI were to cut rates, it would be out of step with the latest trend among major central banks, which are now looking to either tighten policy or move away from ultra-easy policy in place since the financial crisis a decade ago. The US Federal Reserve has been raising rates for the last two years, the Bank of Canada has lifted them twice this year and even the Bank of England put up borrowing costs earlier this month, in part on inflation concerns. The global economy is also fairly strong, with most economies growing simultaneously. Yet at its last policy review, the RBI cut its growth outlook for the current fiscal year to 6.7 percent from 7.3 percent, suggesting it is not close to considering raising rates. The latest Reuters poll found economists overwhelmingly expected no changes to that domestic outlook at the December policy meeting, further evidence that the repo rate is likely to remain on hold at 6.0 percent then and for a while longer. Sajjid Chinoy, chief India economist at JP Morgan, wrote in a recent note to clients that the significant rise in oil prices over recent months, which will pinch consumers through higherinflation, is a good reason for pause. "The resulting jump in inflation, which we now see rising to above 4.5 percent next quarter, is likely to keep the RBI cautious at its December review."

India's inflation likely to rise, interest rates won't: Poll

Afghanistan&rsquo;s economy is expected to grow 2.6 per cent this year, up slightly from the previous year despite deteriorating security, the World Bank said in a report on Tuesday.

While the figure is up from 2.2 per cent last year, it does not keep up with the country&rsquo;s population growth of roughly 3 per cent, meaning that gross domestic product per capita continues to decline.

&ldquo;In the next three to four years, there are things that can be done to boost growth to between 4 and 5 per cent,&rdquo; said Shubham Chaudhuri, the World&rsquo;s Bank&rsquo;s Country Director for Afghanistan.

Chaudhuri, presenting a report on Afghanistan&rsquo;s economy at the World Bank&rsquo;s fortified headquarters in Kabul, said that agriculture, mineral attraction, and the country&rsquo;s youth were its biggest assets, as well as its geography as a regional land bridge.

The improved growth outlook will be welcomed by President Ashraf Ghani, whose technocrat government is seen as unstable but appears to be making the reforms that international donors - who provide more than half of Afghanistan&rsquo;s funding - have been seeking.

Parliamentary elections are due to be held next year, with a presidential vote expected in 2019.

Business sentiment is also on the rise, the World Bank said, though it is still lower than in 2014 when most foreign troops withdrew from Afghanistan.

Growth is significantly below the &ldquo;war economy&rdquo; figures of the late 2000s, which saw annual rises averaging nearly 10 per cent, but the World Bank believes it will continue to rise.

The organisation projects 3.2 per cent growth next year, though that assumes no deterioration in the country&rsquo;s security. This appears unlikely given a recent increase in attacks by various militant groups.

One of the major tests for Afghanistan&rsquo;s stability after a U.S.-led invasion ousted the Taliban government a decade and a half ago is its ability to collect taxes.

Tax revenue in the first eight months of the year was 13 per cent higher than the same period last year, the World Bank said.

The country has long been plagued by corruption and tax evasion.

Inflation remains in the single-digits, with consumer prices up 3.8 per cent in the 12 months to September.

While the figure is up from 2.2% last year, it does not keep up with the country?s population growth of roughly 3%, meaning that gross domestic product per capita continues to decline

Afghanistan’s economy is expected to grow 2.6 per cent this year, up slightly from the previous year despite deteriorating security, the World Bank said in a report on Tuesday. While the figure is up from 2.2 per cent last year, it does not keep up with the country’s population growth of roughly 3 per cent, meaning that gross domestic product per capita continues to decline. “In the next three to four years, there are things that can be done to boost growth to between 4 and 5 per cent,” said Shubham Chaudhuri, the World’s Bank’s Country Director for Afghanistan. Chaudhuri, presenting a report on Afghanistan’s economy at the World Bank’s fortified headquarters in Kabul, said that agriculture, mineral attraction, and the country’s youth were its biggest assets, as well as its geography as a regional land bridge. The improved growth outlook will be welcomed by President Ashraf Ghani, whose technocrat government is seen as unstable but appears to be making the reforms that international donors - who provide more than half of Afghanistan’s funding - have been seeking. Parliamentary elections are due to be held next year, with a presidential vote expected in 2019. Business sentiment is also on the rise, the World Bank said, though it is still lower than in 2014 when most foreign troops withdrew from Afghanistan. Growth is significantly below the “war economy” figures of the late 2000s, which saw annual rises averaging nearly 10 per cent, but the World Bank believes it will continue to rise. The organisation projects 3.2 per cent growth next year, though that assumes no deterioration in the country’s security. This appears unlikely given a recent increase in attacks by various militant groups. One of the major tests for Afghanistan’s stability after a U.S.-led invasion ousted the Taliban government a decade and a half ago is its ability to collect taxes. Tax revenue in the first eight months of the year was 13 per cent higher than the same period last year, the World Bank said. The country has long been plagued by corruption and tax evasion. Inflation remains in the single-digits, with consumer prices up 3.8 per cent in the 12 months to September.

Afghanistan's economy on slow rise, to grow 2.6% this year: World Bank

Inflation at the wholesale level rose to a 6-month high of 3.59 percent in October as the prices of food articles, led by onions and vegetables, rose sharply.

Inflation, based on the Wholesale Price Index (WPI), was 2.60 percent in September. In October last year, it was 1.27 percent.

Last month&#39;s inflation was the highest since April when it was 3.85 percent.

The government data released today showed that inflation in food articles more than doubled to 4.30 percent in October.

For vegetables, it soared to 36.61 percent last month as against 15.48 percent in September.

In case of onions, inflation skyrocketed to 127.04 percent, while for the eggs, meat and fish segment the rate of price rise was 5.76 percent.

Inflation in manufactured products saw a slight dip to 2.62 percent, as against 2.72 percent in September.

In the fuel and power segment, inflation rose to 10.52 percent, as against 9.01 percent in September. Fuel inflation has remained high for the past three months as petrol and diesel prices continued to rule high tracking global crude oil rates.

Power tariffs shot through the roof on lower domestic production.

Pulses continued to witness deflation at 31.05 percent. Likewise, in potato deflation was at 44.29 percent and wheat at 1.99 percent.

The final print of August WPI inflation remained unchanged at 3.24 percent.

As per the Consumer Price Index (CPI) data released yesterday, retail inflation for October rose to a 7-month high of 3.58 percent on costlier food items, especially vegetables.

Besides, industrial production for September expanded at 3.8 percent, on poor showing by the manufacturing sector coupled with a decline in consumer durables output.

Last month, the Reserve Bank kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 percent for the current fiscal.

RBI also raised its inflation forecast to the 4.2-4.6 percent range for the rest of the current fiscal as against 4-4.5 percent previously.&nbsp;

The prices of food articles, led by onions and vegetables, rose sharply

Inflation at the wholesale level rose to a 6-month high of 3.59 percent in October as the prices of food articles, led by onions and vegetables, rose sharply. Inflation, based on the Wholesale Price Index (WPI), was 2.60 percent in September. In October last year, it was 1.27 percent. Last month's inflation was the highest since April when it was 3.85 percent. The government data released today showed that inflation in food articles more than doubled to 4.30 percent in October. For vegetables, it soared to 36.61 percent last month as against 15.48 percent in September. In case of onions, inflation skyrocketed to 127.04 percent, while for the eggs, meat and fish segment the rate of price rise was 5.76 percent. Inflation in manufactured products saw a slight dip to 2.62 percent, as against 2.72 percent in September. In the fuel and power segment, inflation rose to 10.52 percent, as against 9.01 percent in September. Fuel inflation has remained high for the past three months as petrol and diesel prices continued to rule high tracking global crude oil rates. Power tariffs shot through the roof on lower domestic production. Pulses continued to witness deflation at 31.05 percent. Likewise, in potato deflation was at 44.29 percent and wheat at 1.99 percent. The final print of August WPI inflation remained unchanged at 3.24 percent. As per the Consumer Price Index (CPI) data released yesterday, retail inflation for October rose to a 7-month high of 3.58 percent on costlier food items, especially vegetables. Besides, industrial production for September expanded at 3.8 percent, on poor showing by the manufacturing sector coupled with a decline in consumer durables output. Last month, the Reserve Bank kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 percent for the current fiscal. RBI also raised its inflation forecast to the 4.2-4.6 percent range for the rest of the current fiscal as against 4-4.5 percent previously.

WPI inflation at 6-month high of 3.59%

The Nifty touched a fresh high on Friday after data showed inflation unexpectedly held steady in September, while <a href="http://www.wionews.com/business-economy/tatas-to-merge-telecom-business-with-bharti-airtel-22355" target="_blank">Bharti Airtel surged on its deal to buy the Tata conglomerate&#39;s consumer mobile business.</a>

The NSE Nifty ended up 0.7 per cent at 10,167.45, its highest close ever, after having hit a record high of 10,191.90 intraday. The index was up 1.81 per cent for the week.

The benchmark BSE Sensex ended 0.78 per cent higher at 32,432.69. It rose 1.94 per cent for the week, its biggest such gain since the week ended July 14.

Bharti Airtel jumped 7.7 per cent.

Bharti Airtel surged on its deal to buy the Tata conglomerate's consumer mobile business

The Nifty touched a fresh high on Friday after data showed inflation unexpectedly held steady in September, while Bharti Airtel surged on its deal to buy the Tata conglomerate's consumer mobile business. The NSE Nifty ended up 0.7 per cent at 10,167.45, its highest close ever, after having hit a record high of 10,191.90 intraday. The index was up 1.81 per cent for the week. The benchmark BSE Sensex ended 0.78 per cent higher at 32,432.69. It rose 1.94 per cent for the week, its biggest such gain since the week ended July 14. Bharti Airtel jumped 7.7 per cent.

Nifty scales new peak, Bharti Airtel stocks surge

With the price of the tomato skyrocketing, news agency ANI reports, vendors in Indore&#39;s wholesale market have hired armed guards to safeguard the fruit.&nbsp;

ANI reported that the upward movement in prices had led to thefts, leading to tension amongst sellers.&nbsp;

Which is why they had hired the armed security guards.&nbsp;

ANI added that thefts&nbsp;have been reported from elsewhere too.&nbsp;

It said approximately 300 kilograms of tomatoes were stolen from the vegetable market in Mumbai&#39;s Dahisar earlier this week.

The tomatoes were worth Rs 70,000.

Tomato prices have gone up in recent weeks because of crop damage in tomato-producing states.

Tomatoes, in various parts of the country, are selling for Rs 100-120 a&nbsp;kilogram.&nbsp; 
&nbsp;

Tomatoes are selling for Rs 100-120 a?kilogram in various parts of the country

With the price of the tomato skyrocketing, news agency ANI reports, vendors in Indore's wholesale market have hired armed guards to safeguard the fruit. ANI reported that the upward movement in prices had led to thefts, leading to tension amongst sellers. Which is why they had hired the armed security guards. ANI added that thefts have been reported from elsewhere too. It said approximately 300 kilograms of tomatoes were stolen from the vegetable market in Mumbai's Dahisar earlier this week. The tomatoes were worth Rs 70,000. Tomato prices have gone up in recent weeks because of crop damage in tomato-producing states. Tomatoes, in various parts of the country, are selling for Rs 100-120 a kilogram.

Indore: With tomato prices skyrocketing, sellers deploy armed guards to protect stock

Wholesale inflation soared to a 39-month high of 6.55 per cent in February and retail inflation inched up to 3.65 per cent due to rise in food and fuel prices, justifying the RBI&#39;s move to hold rates in last policy meet.

However, the prices of vegetables and pulses remained subdued during the month, giving some relief to consumers, showed the data released by the government today.

The Wholesale Price Index (WPI) based inflation in January was at 5.25 per cent, while the consumer inflation stood at 3.17 per cent.

The rising inflation is likely to refrain the Reserve Bank from cutting interest rates in its next monetary policy review on April 6.

According to the WPI data, food inflation witnessed a sharp 2.69 per cent rise in February, while the fuel basket surged by 21.02 per cent.

Although the inflation rates of cereals, rice and fruits witnessed an increase, vegetables prices declined by 8.05 per cent during February.

The December WPI inflation rate was revised upwards to 3.68 per cent from the previous 3.39 per cent.

As regards the CPI, it rose to a 4-month high of 3.65 per cent in February after touching a multi-year low of 3.17 per cent in the previous month.

Food inflation at the retail level was recorded at 2.01 per cent, while that in fruits was higher at 8.33 per cent, and fuel and light at 3.9 per cent in February. The rate of price rise in meat and fish was 3.5 per cent.

Prices of sugar and confectionery items rose by 18.83 per cent in February while inflation in milk and milk product increased by 4.22 per cent.

The rate of inflation in household goods and services was 4.09 per cent, while it stood at 4 per cent in health segment. The transport and communication became expensive by 5.39 per cent.

ICRA Principal Economist Aditi Nayar said the likelihood of a repo rate cut by the RBI in April 2017 remains subdued, given its focus on bringing inflation to 4 per cent in a durable manner.

&quot;CPI inflation is expected to rise to above 4.5 per cent in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend,&quot; Nayar said.

Industry chamber Assocham said the RBI need not get excessively worried about rising WPI and the easing of the interest rate cycle should continue, because the latest WPI inflation does not indicate any improvement in the pricing power of the manufacturers.&nbsp;

(PTI) 
&nbsp;

Prices of vegetables and pulses remained subdued during the month, giving some relief to consumers

Wholesale inflation soared to a 39-month high of 6.55 per cent in February and retail inflation inched up to 3.65 per cent due to rise in food and fuel prices, justifying the RBI's move to hold rates in last policy meet. However, the prices of vegetables and pulses remained subdued during the month, giving some relief to consumers, showed the data released by the government today. The Wholesale Price Index (WPI) based inflation in January was at 5.25 per cent, while the consumer inflation stood at 3.17 per cent. The rising inflation is likely to refrain the Reserve Bank from cutting interest rates in its next monetary policy review on April 6. According to the WPI data, food inflation witnessed a sharp 2.69 per cent rise in February, while the fuel basket surged by 21.02 per cent. Although the inflation rates of cereals, rice and fruits witnessed an increase, vegetables prices declined by 8.05 per cent during February. The December WPI inflation rate was revised upwards to 3.68 per cent from the previous 3.39 per cent. As regards the CPI, it rose to a 4-month high of 3.65 per cent in February after touching a multi-year low of 3.17 per cent in the previous month. Food inflation at the retail level was recorded at 2.01 per cent, while that in fruits was higher at 8.33 per cent, and fuel and light at 3.9 per cent in February. The rate of price rise in meat and fish was 3.5 per cent. Prices of sugar and confectionery items rose by 18.83 per cent in February while inflation in milk and milk product increased by 4.22 per cent. The rate of inflation in household goods and services was 4.09 per cent, while it stood at 4 per cent in health segment. The transport and communication became expensive by 5.39 per cent. ICRA Principal Economist Aditi Nayar said the likelihood of a repo rate cut by the RBI in April 2017 remains subdued, given its focus on bringing inflation to 4 per cent in a durable manner. "CPI inflation is expected to rise to above 4.5 per cent in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend," Nayar said. Industry chamber Assocham said the RBI need not get excessively worried about rising WPI and the easing of the interest rate cycle should continue, because the latest WPI inflation does not indicate any improvement in the pricing power of the manufacturers. (PTI)

WPI inflation spikes to 39-month high of 6.55% in February

India&#39;s retail inflation cooled to a 13-month low in September, helped by moderating food prices, giving room for the central bank to cut interest rates again if needed.

The consumer price index (CPI) rose 4.31 per cent last month from a year earlier, its slowest pace since August 2015, government data showed on Thursday.

Analysts polled by Reuters had expected the CPI to rise 4.80 per cent, after a 5.05 per cent gain in August.

In a surprise move earlier this month, the Reserve Bank of India (RBI), under new Governor Urjit Patel, cut interest rates by 25 basis points to 6.25 per cent on expectations that food inflation would ease in the months ahead.

The latest prices data backed that assessment as annual food inflation sharply slowed to 3.88 per cent in September from 5.91 per cent a month ago.

With strong crop sowing on the back of good summer rains widely expected to keep a lid on food prices, and a benign outlook for global commodity prices, inflation is expected to remain in check.

&quot;Until February we are going to see benign prints in CPI, which will open up space for at least one more rate cut in fiscal year 2016-17 under the present regime,&quot; said Rupa Rege Nitsure, group chief economist at L&amp;T Finance Holdings.

After this month&#39;s surprise rate cut, many economists revised their interest rate outlook and are now expecting the central bank to cut its key repo rate further by as much as 50 bps.

Bolstering the rate cut hopes is the decision of the RBI&#39;s recently formed monetary policy committee to relax the timeline for meeting its inflation target.

The central bank now expects to hit its 4 per cent inflation target by 2021 instead of 2018 as proposed earlier.

It also slashed the real interest rate target to 1.25 per cent, from the 1.5-2 per cent band set by Patel&#39;s predecessor Raghuram Rajan, giving itself more room to cut rates further.

However, a pending increase in house rent allowance for millions of government employees and pensioners as well as a nationwide rollout of a new sales tax next year are expected to increase prices.&nbsp;

Analysts at Nomura expect the rise in house rent allowance to add 100-150 bps to the headline inflation. Similarly, the implementation of a general sales tax from next April is likely to increase inflation by as much as 70 bps, they say.

 
 
&nbsp;

(Reuters)

Strong crop sowing on the back of good summer rains widely expected to keep food prices from soaring

India's retail inflation cooled to a 13-month low in September, helped by moderating food prices, giving room for the central bank to cut interest rates again if needed. The consumer price index (CPI) rose 4.31 per cent last month from a year earlier, its slowest pace since August 2015, government data showed on Thursday. Analysts polled by Reuters had expected the CPI to rise 4.80 per cent, after a 5.05 per cent gain in August. In a surprise move earlier this month, the Reserve Bank of India (RBI), under new Governor Urjit Patel, cut interest rates by 25 basis points to 6.25 per cent on expectations that food inflation would ease in the months ahead. The latest prices data backed that assessment as annual food inflation sharply slowed to 3.88 per cent in September from 5.91 per cent a month ago. With strong crop sowing on the back of good summer rains widely expected to keep a lid on food prices, and a benign outlook for global commodity prices, inflation is expected to remain in check. "Until February we are going to see benign prints in CPI, which will open up space for at least one more rate cut in fiscal year 2016-17 under the present regime," said Rupa Rege Nitsure, group chief economist at L&T Finance Holdings. After this month's surprise rate cut, many economists revised their interest rate outlook and are now expecting the central bank to cut its key repo rate further by as much as 50 bps. Bolstering the rate cut hopes is the decision of the RBI's recently formed monetary policy committee to relax the timeline for meeting its inflation target. The central bank now expects to hit its 4 per cent inflation target by 2021 instead of 2018 as proposed earlier. It also slashed the real interest rate target to 1.25 per cent, from the 1.5-2 per cent band set by Patel's predecessor Raghuram Rajan, giving itself more room to cut rates further. However, a pending increase in house rent allowance for millions of government employees and pensioners as well as a nationwide rollout of a new sales tax next year are expected to increase prices. Analysts at Nomura expect the rise in house rent allowance to add 100-150 bps to the headline inflation. Similarly, the implementation of a general sales tax from next April is likely to increase inflation by as much as 70 bps, they say. (Reuters)

Indian inflation slows, down to 13-month low

Venezuela&#39;s opposition gathered enough signatures to proceed with efforts to call a referendum on removing President Nicolas Maduro, electoral authorities said Monday, without setting a date for the next step. 
 
The head of the National Electoral Council (CNE), Tibisay Lucena, told a press conference Maduro&#39;s opponents had cleared the threshold of 200,000 valid signatures on a petition demanding the leftist leader face a recall referendum. 
 
The opposition blames Maduro for an economic implosion that has seen food shortages, hyperinflation, violence and looting erupt in the once-booming oil giant. 
 
The council did not set a date for the next stage of the lengthy recall process, in which the opposition must collect four million signatures in just three days. 
 
In a boost to the Maduro camp&#39;s claims of rampant fraud, Lucena said the authorities had detected more than 1,000 apparently falsified signatures. 
 
The opposition submitted 1.8 million signatures in May calling for Maduro to face a recall, 1.3 million of which were accepted by the council. 
 
Signatories then had to show up at electoral offices to validate their identity with fingerprint scans. 
 
The threshold was one per cent of the electorate, or roughly 200,000 signatures which the opposition cleared. 
 
&quot;The certification will be granted by the (CNE) secretariat,&quot; Lucena said. 
 
That enables the main opposition coalition, the Democratic Unity Roundtable (MUD), to formally request a recall vote. 
 
However, Lucena said more than 1,000 fingerprint scans did not correspond with the signatory&#39;s identity, more than 400 were repeats and nearly 200 people tried to register more than once. 
 
&quot;The electoral authority will ask the state prosecutor&#39;s office to investigate the potential usurpation of identity committed by some citizens,&quot; she said. 
 
A recent poll found 64 per cent of Venezuelans would vote to remove Maduro. 
 
But to get there, the opposition first has to collect another four million signatures in three days, at a yet-to-be-decided time. 
 
To win the ensuing recall referendum, Maduro&#39;s opponents would need more votes than he won the presidency with in 2013 around 7.5 million. 
 
Time appears to be on the president&#39;s side. 
 
His allies have an arsenal of possible delaying strategies. They have filed more than 8,000 legal challenges against the recall petition and called on the electoral authorities to ban MUD for alleged fraud. 
 
The opposition is racing to force a referendum by January 10, the cutoff date to trigger new elections four years into the president&#39;s six-year term. 
 
After that date, a successful recall vote would simply transfer power to Maduro&#39;s hand-picked vice-president.US Secretary of State John Kerry urged Venezuela not to stall. 
 
&quot;The Venezuelan constitution guarantees Venezuelans the right to have their voices heard through the referendum process. And we call on Venezuela`s authorities to allow this process to go forward in a timely and a fair manner, and not to play a game of delay,&quot; he said in Washington. 
 
MUD, a motley coalition of opposition parties, accuses the electoral authority of being in bed with Maduro. 
 
They are hoping pressure from Venezuelans desperate over the collapsing economy will force the government&#39;s hand. 
But MUD has struggled to rally mass protests. 
 
Many Venezuelans are too busy standing in line for scarce food and basic goods. 
 
Maduro has declared a state of emergency and given his military sweeping powers over food production and distribution. 
 
Venezuela has sunk into crisis as global prices for its main export, oil, have collapsed. 
 
Its economy is facing its third year of deep recession this year. Its inflation rate is the highest in the world, forecast to top 700 per cent this year. 
 
The economic tailspin is threatening 17 years of socialist rule under Maduro and his late predecessor, Hugo Chavez. 
 
The opposition won legislative elections in December, only to find its power stymied by the Supreme Court, which it says is also in Maduro&#39;s pocket. 
 
(AFP)

According to National Electoral Council, Maduro's opponents had cleared 200,000 valid signatures to call referendum

Venezuela's opposition gathered enough signatures to proceed with efforts to call a referendum on removing President Nicolas Maduro, electoral authorities said Monday, without setting a date for the next step. The head of the National Electoral Council (CNE), Tibisay Lucena, told a press conference Maduro's opponents had cleared the threshold of 200,000 valid signatures on a petition demanding the leftist leader face a recall referendum. The opposition blames Maduro for an economic implosion that has seen food shortages, hyperinflation, violence and looting erupt in the once-booming oil giant. The council did not set a date for the next stage of the lengthy recall process, in which the opposition must collect four million signatures in just three days. In a boost to the Maduro camp's claims of rampant fraud, Lucena said the authorities had detected more than 1,000 apparently falsified signatures. The opposition submitted 1.8 million signatures in May calling for Maduro to face a recall, 1.3 million of which were accepted by the council. Signatories then had to show up at electoral offices to validate their identity with fingerprint scans. The threshold was one per cent of the electorate, or roughly 200,000 signatures which the opposition cleared. "The certification will be granted by the (CNE) secretariat," Lucena said. That enables the main opposition coalition, the Democratic Unity Roundtable (MUD), to formally request a recall vote. However, Lucena said more than 1,000 fingerprint scans did not correspond with the signatory's identity, more than 400 were repeats and nearly 200 people tried to register more than once. "The electoral authority will ask the state prosecutor's office to investigate the potential usurpation of identity committed by some citizens," she said. A recent poll found 64 per cent of Venezuelans would vote to remove Maduro. But to get there, the opposition first has to collect another four million signatures in three days, at a yet-to-be-decided time. To win the ensuing recall referendum, Maduro's opponents would need more votes than he won the presidency with in 2013 around 7.5 million. Time appears to be on the president's side. His allies have an arsenal of possible delaying strategies. They have filed more than 8,000 legal challenges against the recall petition and called on the electoral authorities to ban MUD for alleged fraud. The opposition is racing to force a referendum by January 10, the cutoff date to trigger new elections four years into the president's six-year term. After that date, a successful recall vote would simply transfer power to Maduro's hand-picked vice-president.US Secretary of State John Kerry urged Venezuela not to stall. "The Venezuelan constitution guarantees Venezuelans the right to have their voices heard through the referendum process. And we call on Venezuela`s authorities to allow this process to go forward in a timely and a fair manner, and not to play a game of delay," he said in Washington. MUD, a motley coalition of opposition parties, accuses the electoral authority of being in bed with Maduro. They are hoping pressure from Venezuelans desperate over the collapsing economy will force the government's hand. But MUD has struggled to rally mass protests. Many Venezuelans are too busy standing in line for scarce food and basic goods. Maduro has declared a state of emergency and given his military sweeping powers over food production and distribution. Venezuela has sunk into crisis as global prices for its main export, oil, have collapsed. Its economy is facing its third year of deep recession this year. Its inflation rate is the highest in the world, forecast to top 700 per cent this year. The economic tailspin is threatening 17 years of socialist rule under Maduro and his late predecessor, Hugo Chavez. The opposition won legislative elections in December, only to find its power stymied by the Supreme Court, which it says is also in Maduro's pocket. (AFP)

Venezuela recall clears hurdle, but no date for next step

Inflation surged to 16.5 per cent in Nigeria last month -- its highest level in more than decade -- as prices of imported food and energy jumped after the government stopped propping up the currency, the National Bureau of Statistics said today. 
 
The rate rose from 15.6 per cent in May, the fifth increase in as many months, the NBS said in an emailed statement. The new rate is the highest since October 2005, according to the central bank. 
 
The highest increases were seen in electricity prices, kerosene, furniture and furnishings, road passenger transport, as well as fuels and lubricants, the statistics agency said. 
 
Food prices rose 15.3 per cent year-on-year in June, compared with 14.9 per cent in May.&nbsp;Yvonne Mhango, an economist at Renaissance Capital, told Bloomberg she expected inflation to rise further in the coming months. 
 
&quot;We see inflation averaging in the mid 20 per cent by year-end, mainly because of the foreign exchange rates,&quot; she was quoted as saying. 
 
Nigerians are struggling with spiralling cost of living after a 67 per cent hike in the price of petrol in April and last month&#39;s scrapping of the peg of the Naira exchange rate at 197/199 to the Dollar.&nbsp;The Naira now trades at around 360 to the Dollar on the black market. The official rate is at about 280 to the Dollar. 
 
Nigeria, one of Africa&#39;s main oil producers, normally gets 70 per cent of its revenue from oil sales.&nbsp;But the global fall in crude prices since mid-2014 has left the government cash-strapped and even unable to pay wages. 
 
Public sector workers in most of the country&#39;s 36 states are on strike because of unpaid salaries, with some owed six months&#39; back pay.&nbsp;The International Monetary Fund has said Nigeria&#39;s economy could contract for the first time in more than two decades this year, as a fall in oil revenue and electricity shortages weigh on output. 
 
(AFP)

Public sector workers in most of the country's 36 states are on strike because of unpaid salaries, with some owed six months' back pay

Inflation surged to 16.5 per cent in Nigeria last month -- its highest level in more than decade -- as prices of imported food and energy jumped after the government stopped propping up the currency, the National Bureau of Statistics said today. The rate rose from 15.6 per cent in May, the fifth increase in as many months, the NBS said in an emailed statement. The new rate is the highest since October 2005, according to the central bank. The highest increases were seen in electricity prices, kerosene, furniture and furnishings, road passenger transport, as well as fuels and lubricants, the statistics agency said. Food prices rose 15.3 per cent year-on-year in June, compared with 14.9 per cent in May. Yvonne Mhango, an economist at Renaissance Capital, told Bloomberg she expected inflation to rise further in the coming months. "We see inflation averaging in the mid 20 per cent by year-end, mainly because of the foreign exchange rates," she was quoted as saying. Nigerians are struggling with spiralling cost of living after a 67 per cent hike in the price of petrol in April and last month's scrapping of the peg of the Naira exchange rate at 197/199 to the Dollar. The Naira now trades at around 360 to the Dollar on the black market. The official rate is at about 280 to the Dollar. Nigeria, one of Africa's main oil producers, normally gets 70 per cent of its revenue from oil sales. But the global fall in crude prices since mid-2014 has left the government cash-strapped and even unable to pay wages. Public sector workers in most of the country's 36 states are on strike because of unpaid salaries, with some owed six months' back pay. The International Monetary Fund has said Nigeria's economy could contract for the first time in more than two decades this year, as a fall in oil revenue and electricity shortages weigh on output. (AFP)

Nigerian inflation rises to 11-year high

India&#39;s headline inflation probably stayed near a two-year high in June even as industrial production in May likely contracted, increasing the odds that the central bank will keep interest rates on hold next month. 
 
Consumer prices in June are estimated to have risen 5.73 per cent on an annual basis, according to a Reuters poll, a tad lower than May&#39;s 5.76 per cent - the fastest pace since August 2014.&nbsp;That would be a worry for outgoing Reserve Bank of India (RBI) Governor Raghuram Rajan, who wants inflation kept below at 5 per cent by March 2017. 
 
The Aug. 9 policy meeting will be the last for Rajan, whose three-year term ends in early September. Between January 2015 and this April, he cut the repo rate by 150 basis points, to 6.50 per cent.&nbsp;After holding rates in June, the governor said the central bank was looking for room to reduce them further, but it remained concerned about pressure on food and commodity prices. 
 
Demand-driven pressures are likely to be stoked by the hike of salaries and pensions for about 10 million government employees and pensioners. Vegetable prices, meanwhile, have surged due to seasonal supply disruptions. 
 
While a pick-up in summer monsoon rains in recent weeks is expected to cool food inflation, most analysts don&#39;t expect another rate cut before a new governor is on the job. DBS in Singapore expects a rate cut in the October-December quarter. 
 
New Governor, New Mechanism 
 
Prime Minister Narendra Modi is widely expected to name a new governor before July 18. Government sources say the race is mainly between former RBI deputy governors Rakesh Mohan and Subir Gokarn. 
 
The government has to also constitute a Monetary Policy Committee (MPC) to set interest rates by a majority vote, a departure from the current regime where the decision effectively rests with the RBI chief.&nbsp;It aims to name the six-member committee before the August policy review. Three members of the MPC would be RBI insiders, headed by the governor who would have the casting vote in the event of a 3-3 split. 
 
Three external members would be chosen by a panel comprising Modi&#39;s cabinet secretary, the RBI governor, a top finance ministry bureaucrat and three outside experts named by the government.&nbsp;India&#39;s statistics office will release retail inflation data and industrial production data at 1200 GMT today. 
 
Analysts surveyed by Reuters expect output at factories, mines and utilities to shrink 0.4 per cent in May from a year earlier compared with a surprise 0.8 per cent annual contraction a month ago. 
 
(Reuters)

According to a Reuters poll, consumer prices in June rose 5.73 per cent on an annual basis, a tad lower than May's 5.76

India's headline inflation probably stayed near a two-year high in June even as industrial production in May likely contracted, increasing the odds that the central bank will keep interest rates on hold next month. Consumer prices in June are estimated to have risen 5.73 per cent on an annual basis, according to a Reuters poll, a tad lower than May's 5.76 per cent - the fastest pace since August 2014. That would be a worry for outgoing Reserve Bank of India (RBI) Governor Raghuram Rajan, who wants inflation kept below at 5 per cent by March 2017. The Aug. 9 policy meeting will be the last for Rajan, whose three-year term ends in early September. Between January 2015 and this April, he cut the repo rate by 150 basis points, to 6.50 per cent. After holding rates in June, the governor said the central bank was looking for room to reduce them further, but it remained concerned about pressure on food and commodity prices. Demand-driven pressures are likely to be stoked by the hike of salaries and pensions for about 10 million government employees and pensioners. Vegetable prices, meanwhile, have surged due to seasonal supply disruptions. While a pick-up in summer monsoon rains in recent weeks is expected to cool food inflation, most analysts don't expect another rate cut before a new governor is on the job. DBS in Singapore expects a rate cut in the October-December quarter. New Governor, New Mechanism Prime Minister Narendra Modi is widely expected to name a new governor before July 18. Government sources say the race is mainly between former RBI deputy governors Rakesh Mohan and Subir Gokarn. The government has to also constitute a Monetary Policy Committee (MPC) to set interest rates by a majority vote, a departure from the current regime where the decision effectively rests with the RBI chief. It aims to name the six-member committee before the August policy review. Three members of the MPC would be RBI insiders, headed by the governor who would have the casting vote in the event of a 3-3 split. Three external members would be chosen by a panel comprising Modi's cabinet secretary, the RBI governor, a top finance ministry bureaucrat and three outside experts named by the government. India's statistics office will release retail inflation data and industrial production data at 1200 GMT today. Analysts surveyed by Reuters expect output at factories, mines and utilities to shrink 0.4 per cent in May from a year earlier compared with a surprise 0.8 per cent annual contraction a month ago. (Reuters)

India's retail inflation expected to remain high in June

China&#39;s consumer price growth slowed in June, the National Bureau of Statistics (NBS) said today, giving the central government room for further monetary stimulus to stabilise economic growth. 
 
The consumer price index (CPI) -- a main gauge of inflation -- rose 1.9 perc ent on-year, the National Bureau of Statistics said, lower than May&#39;s 2.0 per cent but higher than the 1.8 median forecast in a Bloomberg News survey of economists. 
 
Moderate inflation can be a boon to consumption as it pushes buyers to act before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth. 
 
Food prices fell 1.4 per cent month-on-month, the data showed, weighing down the overall inflation figures. 
 
The world&#39;s second largest economy expanded last year at its slowest rate in a quarter of a century as Beijing strives to effect a difficult transition in its growth model away from reliance on exports and fixed-asset investment towards one driven by consumers.&nbsp; 
 
The producer price index (PPI), which measures the cost of goods at the factory gate, fell 2.6 per cent year-on-year last month, narrower than the 2.8 per cent decline in May, as deflation pressures eased due to a rebound in some commodity prices. 
 
Protracted declines in PPI bode ill for industrial prospects, but narrowing declines in the last two months have fuelled hopes the Chinese economy could be reaching the bottom of a painful slowdown. 
 
Looking ahead, analysts said widespread flooding due to summer heavy rains could put short-term pressure on China&#39;s industrial output.&nbsp; 
 
Construction is likely to spike once the floods subside, but in the short term industrial production growth will see &quot;negative shocks&quot;, Zhang Yao of Nomura said in a note.&nbsp; 
 
Food prices could spike due to the destruction of crops and livestock by floods, said Chang Liu of Capital Economics, increasing the risks of an rise in consumer inflation in the second half of the year. 
 
(AFP)

This will allow the central government room for further monetary stimulus to stabilise the economic growth

China's consumer price growth slowed in June, the National Bureau of Statistics (NBS) said today, giving the central government room for further monetary stimulus to stabilise economic growth. The consumer price index (CPI) -- a main gauge of inflation -- rose 1.9 perc ent on-year, the National Bureau of Statistics said, lower than May's 2.0 per cent but higher than the 1.8 median forecast in a Bloomberg News survey of economists. Moderate inflation can be a boon to consumption as it pushes buyers to act before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth. Food prices fell 1.4 per cent month-on-month, the data showed, weighing down the overall inflation figures. The world's second largest economy expanded last year at its slowest rate in a quarter of a century as Beijing strives to effect a difficult transition in its growth model away from reliance on exports and fixed-asset investment towards one driven by consumers. The producer price index (PPI), which measures the cost of goods at the factory gate, fell 2.6 per cent year-on-year last month, narrower than the 2.8 per cent decline in May, as deflation pressures eased due to a rebound in some commodity prices. Protracted declines in PPI bode ill for industrial prospects, but narrowing declines in the last two months have fuelled hopes the Chinese economy could be reaching the bottom of a painful slowdown. Looking ahead, analysts said widespread flooding due to summer heavy rains could put short-term pressure on China's industrial output. Construction is likely to spike once the floods subside, but in the short term industrial production growth will see "negative shocks", Zhang Yao of Nomura said in a note. Food prices could spike due to the destruction of crops and livestock by floods, said Chang Liu of Capital Economics, increasing the risks of an rise in consumer inflation in the second half of the year. (AFP)

China inflation slowed in June

Marco Streng is a miner, though he does not carry a pick around his base in south-west Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. 
 
In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng&#39;s which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. 
 
Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers. 
 
The work Streng&#39;s computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and, because they earn new bitcoins for the work they do, steadily increase the currency in circulation, worth around $10 billion at present. 
 
The process has come to be known as &#39;mining&#39; because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground. 
 
But on Saturday, the reward for miners will be slashed in half. Written into bitcoin&#39;s code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation. 
 
From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate, only 12.5 will be available. 
 
That means only the mining companies with the leanest operations will survive the ensuing profit hit. 
 
&quot;The most important thing is to be the most efficient miner,&quot; said Streng, the 26-year-old co-founder of German firm Genesis Mining, which has &quot;mining farms&quot; in Canada, the United States and eastern Europe, as well as in Iceland. &quot;When the others drop out, that means that they leave the market and give you a bigger share of the pie.&quot; 
 
Solving puzzles 
 
The currency was founded eight years ago by a person or group using the name Satoshi Nakamoto, whose real identity has not been established. It was set up to operate independently of any single authority, instead relying on a decentralised global network. 
 
Because the bitcoin miners operate autonomously, it is hard to track their numbers and size. But in terms of computing capacity, it was estimated earlier this year that the network is 43,000 times more powerful than the world&#39;s top 500 supercomputers combined. 
 
Computers like Streng&#39;s solve complex, automatically generated mathematical puzzles to help secure each block of transactions and keep the bitcoin network safe from hacking or manipulation. For bitcoin users, that security is one of the currency&#39;s main attractions. 
 
After the first miner secures a block of transactions, its work is verified by the other miners in the network, and that block is added to the &quot;blockchain&quot; - a shared record of all the transaction data - which is virtually impossible to tamper with. The mining, therefore, keeps the whole system going. 
 
Bitcoin is now accepted by major organisations including US online retailer Overstock.com and travel company Expedia. 
 
The speed and anonymity of bitcoin transactions, and lack of a central authority overseeing the currency, has drawn in many users, including those who want to get around capital controls. It has also attracted investors who see it as a potentially lucrative commodity in itself. 
 
Keeping cool 
 
Bitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialised as bitcoin usage expands. 
 
As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialised that they can only perform the function of bitcoin mining, a whole industry has emerged. 
 
It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high. 
 
Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin. Equipment, rent, wages and business running costs are on top. 
 
On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin. 
 
In the same remote region of Iceland as the Genesis mining farm, on a former Cold War US military base lies a bitcoin mining facility belonging to US firm Bitfury. A nearby sub-station means electricity transmission costs are minimal. 
 
In the farm&#39;s two vast buildings, tens of thousands of mining machines whir away, producing a huge amount of heat, so the buildings are open to the cold Icelandic air at either side, save for particle filters to trap dust. 
 
Fans in the ceiling allow hot air to escape, but spin so fast that no rain or snow can enter during the winter. The noise produced by computers and fans is deafening. 
 
It is no coincidence that so many mining companies have chosen to build farms in Iceland - Chinese giant Bitmain also has a huge farm there. The volcanic island&#39;s cheap, bountiful, renewable energy supply, good internet connectivity, and cool temperatures make it an ideal location. 
 
The Icelandic authorities welcome the boost to the economy that the bitcoin miners have brought. Bitmain opened its farm after an approach by the Icelandic embassy in Beijing. Genesis&#39;s Streng says he is such a valued client that the Icelandic energy companies fly him around in helicopters. 
 
Bitfury CEO Valery Vavilov, who estimates electricity makes up between 90 and 95 per cent of bitcoin mining costs, says one way his firm stays competitive is by making its own hardware. 
 
He also says the company, founded in 2011, is prepared for the mining reward cut. &quot;We&#39;re prepared - we already went through one halving event in 2012,&quot; he said. &quot;You can forecast this... so you have time to prepare, and if you&#39;re prepared you can live quite easily&quot;. 
 
Vavilov, and other miners, say the prospect of new supply halving has already helped drive bitcoin up over 50 per cent this year, which should help ease the pain. 
 
Competition from China 
 
Despite the fact that the halving was expected, and that the price has risen, it has already claimed one casualty: Sweden&#39;s KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring. 
 
Daniel Masters, who runs a Jersey-based bitcoin hedge fund and who bought a part of KnC&#39;s business, said the Swedish firm, like everybody else, had faced competition from miners in China, which are estimated to make up more than two-thirds of the bitcoin network&#39;s computing power, or &quot;hashpower&quot;. 
 
&quot;It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper,&quot; Masters said. 
 
Some Chinese miners get hydroelectric power from disused dams, while others use cheap coal-powered electricity. 
 
Bitfury and Genesis, though, say their lean operations allow them to fight off the competition. Genesis, for example, keeps cost down by remotely monitoring conditions in its mining farms and adjusting its fans and cooling accordingly. 
 
And the next time the mining reward is halved, in 2020, they hope the number of bitcoin transactions will have grown sufficiently to mean that the small fees paid by users will make up enough of their income to smooth out the profit cut. 
 
&quot;By 2020, we will definitely have had the tipping point,&quot; said Bitfury&#39;s Vavilov. 
 
(Reuters)&nbsp;

Written into the online currency's code is a rule that the reward for miners gets cut in half every four years to limit inflation

Marco Streng is a miner, though he does not carry a pick around his base in south-west Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng's which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers. The work Streng's computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and, because they earn new bitcoins for the work they do, steadily increase the currency in circulation, worth around $10 billion at present. The process has come to be known as 'mining' because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground. But on Saturday, the reward for miners will be slashed in half. Written into bitcoin's code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation. From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate, only 12.5 will be available. That means only the mining companies with the leanest operations will survive the ensuing profit hit. "The most important thing is to be the most efficient miner," said Streng, the 26-year-old co-founder of German firm Genesis Mining, which has "mining farms" in Canada, the United States and eastern Europe, as well as in Iceland. "When the others drop out, that means that they leave the market and give you a bigger share of the pie." Solving puzzles The currency was founded eight years ago by a person or group using the name Satoshi Nakamoto, whose real identity has not been established. It was set up to operate independently of any single authority, instead relying on a decentralised global network. Because the bitcoin miners operate autonomously, it is hard to track their numbers and size. But in terms of computing capacity, it was estimated earlier this year that the network is 43,000 times more powerful than the world's top 500 supercomputers combined. Computers like Streng's solve complex, automatically generated mathematical puzzles to help secure each block of transactions and keep the bitcoin network safe from hacking or manipulation. For bitcoin users, that security is one of the currency's main attractions. After the first miner secures a block of transactions, its work is verified by the other miners in the network, and that block is added to the "blockchain" - a shared record of all the transaction data - which is virtually impossible to tamper with. The mining, therefore, keeps the whole system going. Bitcoin is now accepted by major organisations including US online retailer Overstock.com and travel company Expedia. The speed and anonymity of bitcoin transactions, and lack of a central authority overseeing the currency, has drawn in many users, including those who want to get around capital controls. It has also attracted investors who see it as a potentially lucrative commodity in itself. Keeping cool Bitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialised as bitcoin usage expands. As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialised that they can only perform the function of bitcoin mining, a whole industry has emerged. It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high. Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin. Equipment, rent, wages and business running costs are on top. On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin. In the same remote region of Iceland as the Genesis mining farm, on a former Cold War US military base lies a bitcoin mining facility belonging to US firm Bitfury. A nearby sub-station means electricity transmission costs are minimal. In the farm's two vast buildings, tens of thousands of mining machines whir away, producing a huge amount of heat, so the buildings are open to the cold Icelandic air at either side, save for particle filters to trap dust. Fans in the ceiling allow hot air to escape, but spin so fast that no rain or snow can enter during the winter. The noise produced by computers and fans is deafening. It is no coincidence that so many mining companies have chosen to build farms in Iceland - Chinese giant Bitmain also has a huge farm there. The volcanic island's cheap, bountiful, renewable energy supply, good internet connectivity, and cool temperatures make it an ideal location. The Icelandic authorities welcome the boost to the economy that the bitcoin miners have brought. Bitmain opened its farm after an approach by the Icelandic embassy in Beijing. Genesis's Streng says he is such a valued client that the Icelandic energy companies fly him around in helicopters. Bitfury CEO Valery Vavilov, who estimates electricity makes up between 90 and 95 per cent of bitcoin mining costs, says one way his firm stays competitive is by making its own hardware. He also says the company, founded in 2011, is prepared for the mining reward cut. "We're prepared - we already went through one halving event in 2012," he said. "You can forecast this... so you have time to prepare, and if you're prepared you can live quite easily". Vavilov, and other miners, say the prospect of new supply halving has already helped drive bitcoin up over 50 per cent this year, which should help ease the pain. Competition from China Despite the fact that the halving was expected, and that the price has risen, it has already claimed one casualty: Sweden's KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring. Daniel Masters, who runs a Jersey-based bitcoin hedge fund and who bought a part of KnC's business, said the Swedish firm, like everybody else, had faced competition from miners in China, which are estimated to make up more than two-thirds of the bitcoin network's computing power, or "hashpower". "It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper," Masters said. Some Chinese miners get hydroelectric power from disused dams, while others use cheap coal-powered electricity. Bitfury and Genesis, though, say their lean operations allow them to fight off the competition. Genesis, for example, keeps cost down by remotely monitoring conditions in its mining farms and adjusting its fans and cooling accordingly. And the next time the mining reward is halved, in 2020, they hope the number of bitcoin transactions will have grown sufficiently to mean that the small fees paid by users will make up enough of their income to smooth out the profit cut. "By 2020, we will definitely have had the tipping point," said Bitfury's Vavilov. (Reuters)

Bitcoin 'miners' face fight for survival

Reserve Bank of India (RBI), central bank of India, Governor Raghuram Rajan, who has faced criticism from members of the ruling party for keeping interest rates too high, stunned officials on Saturday by announcing he would step down when his term ends on September 4. 
 
Rajan, a former chief economist at the IMF, has been popular with foreign investors for his efforts to tackle inflation, and won praise for helping rescue India from its worst currency crisis in more than two decades after taking the helm in September 2013. 
 
But in a nearly 900-world letter to staff he said he planned to return to academia, even as he noted two of his actions - the creation of a monetary policy committee to set interest rates and the clean-up of the banking sector - remained unfinished. 
 
&quot;While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016,&quot; Rajan said in the letter released by the RBI. 
 
&quot;I will, of course, always be available to serve my country when needed.&quot; 
 
Rajan, who is on leave from the University of Chicago, was appointed RBI Governor by the previous Congress government, where he had served as chief economic advisor to the finance minister for about a year before taking the helm of the central bank. 
 
&quot;The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly,&quot; Finance Minister Arun Jaitley said in a tweet on Saturday. 
 
Although feted by investors, Rajan had faced strident criticism from right-wing members of Prime Minister Narendra Modi&#39;s Bharatiya Janata Party, including parliament member Subramanian Swamy, who has waged a public campaign against his economic policies. 
 
Rajan had also veered into topics - such as intolerance in society - that have angered some BJP members, as did recent comments that were seen by some government officials as playing down their economic accomplishments. 
 
&quot;GOOD TEACHER&quot; 
 
Still, Rajan was known to have a good working relationship with Modi, with the Prime Minister calling the RBI governor a &quot;good teacher&quot; on economic matters, and government officials had previously told Reuters that Modi&#39;s administration would re-appoint the governor, should he wish to stay on. 
 
Many of Rajan&#39;s key accomplishments have come in close collaboration with the Modi government. 
 
Rajan pushed for inflation targeting to tackle India&#39;s history of volatile prices, which was then unveiled by the government last year. 
 
He has also worked with the government on the creation of a monetary policy committee as well as the clean-up of heavily indebted banks - both of which may now have to be tackled by his successor. 
 
Current RBI Deputy Governor Urjit Patel, State Bank of India chairman Arundhati Bhattacharya, the finance ministry&#39;s Chief Economic Adviser Arvind Subramanian and the government&#39;s Economic Affairs Secretary Shaktikanta Das have previously been named by analysts as potential replacements should Rajan depart. 
 
Analysts said markets would likely react negatively on Monday, at a time when global factors such as Britain&#39;s referendum on European Union membership are already weighing. Though many analysts had speculated Rajan could decide not to pursue a second term, few had foreseen it would come in the form of a letter to staff. 
 
Senior government and RBI officials contacted by Reuters said they had been taken by surprise at the announcement. 
 
&quot;This will be seen as a disappointment by the market particularly the international investors&#39; community,&quot; said Ananth Narayan, regional head of financial markets for ASEAN and South Asia at Standard Chartered Bank. 
 
&quot;And we can only hope the government quickly announces a strong replacement to fill his big shoes.&quot; 
(Reuters)

Investors loved him, Modi had a strong like but more right-wing members of India's ruling party were strident critics

Reserve Bank of India (RBI), central bank of India, Governor Raghuram Rajan, who has faced criticism from members of the ruling party for keeping interest rates too high, stunned officials on Saturday by announcing he would step down when his term ends on September 4. Rajan, a former chief economist at the IMF, has been popular with foreign investors for his efforts to tackle inflation, and won praise for helping rescue India from its worst currency crisis in more than two decades after taking the helm in September 2013. But in a nearly 900-world letter to staff he said he planned to return to academia, even as he noted two of his actions - the creation of a monetary policy committee to set interest rates and the clean-up of the banking sector - remained unfinished. "While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016," Rajan said in the letter released by the RBI. "I will, of course, always be available to serve my country when needed." Rajan, who is on leave from the University of Chicago, was appointed RBI Governor by the previous Congress government, where he had served as chief economic advisor to the finance minister for about a year before taking the helm of the central bank. "The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly," Finance Minister Arun Jaitley said in a tweet on Saturday. Although feted by investors, Rajan had faced strident criticism from right-wing members of Prime Minister Narendra Modi's Bharatiya Janata Party, including parliament member Subramanian Swamy, who has waged a public campaign against his economic policies. Rajan had also veered into topics - such as intolerance in society - that have angered some BJP members, as did recent comments that were seen by some government officials as playing down their economic accomplishments. "GOOD TEACHER" Still, Rajan was known to have a good working relationship with Modi, with the Prime Minister calling the RBI governor a "good teacher" on economic matters, and government officials had previously told Reuters that Modi's administration would re-appoint the governor, should he wish to stay on. Many of Rajan's key accomplishments have come in close collaboration with the Modi government. Rajan pushed for inflation targeting to tackle India's history of volatile prices, which was then unveiled by the government last year. He has also worked with the government on the creation of a monetary policy committee as well as the clean-up of heavily indebted banks - both of which may now have to be tackled by his successor. Current RBI Deputy Governor Urjit Patel, State Bank of India chairman Arundhati Bhattacharya, the finance ministry's Chief Economic Adviser Arvind Subramanian and the government's Economic Affairs Secretary Shaktikanta Das have previously been named by analysts as potential replacements should Rajan depart. Analysts said markets would likely react negatively on Monday, at a time when global factors such as Britain's referendum on European Union membership are already weighing. Though many analysts had speculated Rajan could decide not to pursue a second term, few had foreseen it would come in the form of a letter to staff. Senior government and RBI officials contacted by Reuters said they had been taken by surprise at the announcement. "This will be seen as a disappointment by the market particularly the international investors' community," said Ananth Narayan, regional head of financial markets for ASEAN and South Asia at Standard Chartered Bank. "And we can only hope the government quickly announces a strong replacement to fill his big shoes." (Reuters)

Reserve Bank of India chief Raghuram Rajan to step down

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