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.

The figure is higher than the Reserve Bank of India&#39;s 4% medium-term target, reducing room for the central bank to change the repo rate -- the rate at which the central bank lends money to commercial banks -- in the near future.&nbsp;

Economists polled by Reuters had predicted consumer inflation would rise to 4.2 % in November, following unseasonably heavy rains which increased food prices.

Also read:&nbsp;<a href="http://www.wionews.com/business-economy/indias-economy-to-grow-at-72-in-2018-un-26543" target="_blank">India&#39;s economy to grow at 7.2% in 2018, says UN</a>

Industrial output growth meanwhile slowed to 2.2% in October from 3.8% in September, with demand continuing to suffer from the&nbsp;disruption caused by the rollout of the new Goods and Services Tax (GST). &nbsp;&nbsp;

At its December 6 policy meeting, the RBI raised its inflation projection by 10 basis points to between 4.3% to 4.7 % for the six months ending in March.

&nbsp;

The number is higher than the RBI's 4% medium-term target

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. The figure is higher than the Reserve Bank of India's 4% medium-term target, reducing room for the central bank to change the repo rate -- the rate at which the central bank lends money to commercial banks -- in the near future. Economists polled by Reuters had predicted consumer inflation would rise to 4.2 % in November, following unseasonably heavy rains which increased food prices. Also read: India's economy to grow at 7.2% in 2018, says UN 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). At its December 6 policy meeting, the RBI raised its inflation projection by 10 basis points to between 4.3% to 4.7 % for the six months ending in March.

Retail inflation hits 15-month high of 4.88% in November

India&#39;s annual consumer price inflation further eased to 1.54 percent in June, helped by a fall in food prices, government data showed on Wednesday.

The rise was slower than 1.70 percent forecast by economists in a Reuters poll, and was the lowest since India started releasing retail inflation data in January 2012 based on a combined CPI index for rural and urban consumers.

Consumer prices rose 2.18 percent year-on-year in May.

Retail food prices fell 2.12 percent last month from a year ago, compared with a 1.05 percent fall in the previous month.

(Reuters)

The rise was slower than 1.70 percent forecast by economists in a Reuters poll

India's annual consumer price inflation further eased to 1.54 percent in June, helped by a fall in food prices, government data showed on Wednesday. The rise was slower than 1.70 percent forecast by economists in a Reuters poll, and was the lowest since India started releasing retail inflation data in January 2012 based on a combined CPI index for rural and urban consumers. Consumer prices rose 2.18 percent year-on-year in May. Retail food prices fell 2.12 percent last month from a year ago, compared with a 1.05 percent fall in the previous month. (Reuters)

Retail inflation at 1.57%, slips to record low

India&#39;s inflation cooled to its lowest in at least five years in January as food prices fell following the government&#39;s cash clampdown, but emerging price pressures mean the Reserve Bank of India (RBI) will probably keep interest rates on hold.

Consumer prices rose by an annual 3.17 per cent last month - their slowest pace since January 2012, when the government launched the current index series.

Economists surveyed by Reuters had expected prices to rise by 3.22 per cent from a year earlier, compared with December&#39;s 3.41 percent increase.

Annual retail food inflation eased to 0.53 per cent last month from 1.37 percent in December, helped by lower prices for vegetables and pulses, government data showed on Monday.

In a worry for the central bank, another inflation gauge that excludes volatile food and fuel prices accelerated to around 5.1 per cent in January, after hovering around 4.9 per cent since September.

The RBI&#39;s monetary policy committee reckons sticky core inflation could trigger wide side-effects.

&quot;The RBI is seeing upside risks to inflation and one data point is not going to change their view dramatically,&quot; said Varun Khandelwal, managing director at Bullero Capital.

&quot;Interest rates will remain on hold in the near term.&quot;

Headline inflation has been under 4 per cent since November, well below the RBI&#39;s 5 per cent target for March and medium-term target of 4 per cent.

End of loosening cycle

Still, the RBI last week shocked investors by holding the repo rate at 6.25 per cent and shifting its monetary policy stance to &quot;neutral&quot; from &quot;accommodative&quot;.

The shift comes as Asia&#39;s third-largest economy is still limping back to health after Prime Minister Narendra Modi&#39;s Nov. 8 decision to outlaw old 500- and 1,000- rupee banknotes wiped out 86 per cent of the currency in circulation overnight.

Industrial production fell 0.4 per cent, year on year, in December, government data showed last week.

Even as the economic fallout of demonetisation remains unclear, the RBI is worried about a pick-up in global crude prices along with exchange rate volatility, which it says could push headline inflation above its medium-term target.

Global crude oil prices are up nearly 14 per cent since end-November. The Indian rupee is expected to weaken by nearly 4 percent from its current levels to 69.50 a dollar in 12 months.

Most economists now expect the RBI to hold rates until at least the second half of next year.

&quot;We continue to believe that the RBI will have to tighten

policy sooner than most are anticipating,&quot; Capital Economics said in a flash note.

(Reuters)

But emerging price pressures mean India's central bank will probably keep interest rates on hold

India's inflation cooled to its lowest in at least five years in January as food prices fell following the government's cash clampdown, but emerging price pressures mean the Reserve Bank of India (RBI) will probably keep interest rates on hold. Consumer prices rose by an annual 3.17 per cent last month - their slowest pace since January 2012, when the government launched the current index series. Economists surveyed by Reuters had expected prices to rise by 3.22 per cent from a year earlier, compared with December's 3.41 percent increase. Annual retail food inflation eased to 0.53 per cent last month from 1.37 percent in December, helped by lower prices for vegetables and pulses, government data showed on Monday. In a worry for the central bank, another inflation gauge that excludes volatile food and fuel prices accelerated to around 5.1 per cent in January, after hovering around 4.9 per cent since September. The RBI's monetary policy committee reckons sticky core inflation could trigger wide side-effects. "The RBI is seeing upside risks to inflation and one data point is not going to change their view dramatically," said Varun Khandelwal, managing director at Bullero Capital. "Interest rates will remain on hold in the near term." Headline inflation has been under 4 per cent since November, well below the RBI's 5 per cent target for March and medium-term target of 4 per cent. End of loosening cycle Still, the RBI last week shocked investors by holding the repo rate at 6.25 per cent and shifting its monetary policy stance to "neutral" from "accommodative". The shift comes as Asia's third-largest economy is still limping back to health after Prime Minister Narendra Modi's Nov. 8 decision to outlaw old 500- and 1,000- rupee banknotes wiped out 86 per cent of the currency in circulation overnight. Industrial production fell 0.4 per cent, year on year, in December, government data showed last week. Even as the economic fallout of demonetisation remains unclear, the RBI is worried about a pick-up in global crude prices along with exchange rate volatility, which it says could push headline inflation above its medium-term target. Global crude oil prices are up nearly 14 per cent since end-November. The Indian rupee is expected to weaken by nearly 4 percent from its current levels to 69.50 a dollar in 12 months. Most economists now expect the RBI to hold rates until at least the second half of next year. "We continue to believe that the RBI will have to tighten policy sooner than most are anticipating," Capital Economics said in a flash note. (Reuters)

India's retail inflation lowest in about five years

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

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