Subbarao expects inflation to trend lower in January-March

KOLKATA Thu Dec 6, 2012 4:58pm IST

Reserve Bank of India's Governor Duvvuri Subbarao speaks during a meeting with bankers before unveiling the monetary policy review at the head office in Mumbai April 21, 2009. REUTERS/Punit Paranjpe/Files

Reserve Bank of India's Governor Duvvuri Subbarao speaks during a meeting with bankers before unveiling the monetary policy review at the head office in Mumbai April 21, 2009.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Border Security Force (BSF) soldiers ride their camels as they rehearse for the "Beating the Retreat" ceremony in New Delhi January 27, 2015. REUTERS/Ahmad Masood

"Beating The Retreat" Rehearsals

Rehearsals are on for "Beating the Retreat" ceremony which symbolises retreat after a day on the battlefield, and marks the official end of the Republic Day celebrations.  Slideshow 

KOLKATA (Reuters) - India's inflation is expected to trend lower during January-March, Reserve Bank of India Governor Duvvuri Subbarao said on Thursday, a month after he had indicated the central bank might ease monetary policy as early as January.

"It (inflation) has come down from its peak, but at 7.50 percent, inflation is still high," he told reporters after the RBI's board meeting in Kolkata.

"We are expecting that inflation will trend down starting the fourth quarter of this fiscal year. As we go into our mid-quarter policy on December 18 and the quarterly policy on January 29, we will take into account the growth-inflation trajectory and calibrate our monetary policy accordingly."

The headline inflation rate, based on the wholesale price index, rose an annual 7.45 percent in October, the slowest pace in February.

The RBI projects WPI at 7.5 percent at March-end, after revising the projection upwards twice earlier this year.

The RBI, which was a hawkish outlier long after many central banks began loosening policy, has refrained from lowering rates following sticky and elevated inflation since the April rate cut despite slowing growth.

However, pressure from government and industry bodies has mounted over the last few months to cut policy rates due to the sharp slowdown in economic growth.

India's services sector, which makes up nearly 60 percent of economic output, grew at its weakest pace in over a year in November, an HSBC services Purchasing Managers' Index, showed on Wednesday.

In the October review of the monetary policy, Subbarao said there was a "reasonable likelihood" of further easing in the January-March quarter.

(Reporting by Shamik Paul, writing by Neha Dasgupta; Editing by Jonathan Thatcher)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Reuters Showcase

Divestment Plans

Divestment Plans

ONGC share sale scheduled for this fiscal - oil minister.  Full Article 

Market Eye

Market Eye

Sensex, Nifty retreat from record highs on profit-taking.  Full Article 

Tech Talk

Tech Talk

Apple takes high road in China smartphone standoff with Xiaomi.  Full Article 

Business Strategy

Business Strategy

Uber scraps commissions for its New Delhi taxis.  Full Article 

Currencies

Currencies

China's yuan breaks into the world's top five as payment currency - SWIFT.  Full Article 

Job Cuts

Job Cuts

Sony to cut 1,000 jobs in smartphone business - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage