Rupee reverses losses after inflation rate eases

MUMBAI Fri Dec 14, 2012 12:57pm IST

An employee arranges currency notes at a cash counter inside a bank in Agartala February 18, 2010. REUTERS/Jayanta Dey/Files

An employee arranges currency notes at a cash counter inside a bank in Agartala February 18, 2010.

Credit: Reuters/Jayanta Dey/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The rupee recovered from early losses to trade higher on Friday after headline inflation surprised on the downside, raising hopes the central bank could start cutting interest rates as early as January.

India's wholesale price index rose a slower-than-expected 7.24 percent in November, less than the 7.6 percent estimated by a Reuters poll.

While most economists and market participants believe the central bank may hold rates steady on December 18., some are now expecting that it will infuse some liquidity in the form of a cash reserve ratio cut.

"The trending and expectation in headline inflation has improved, paving way for start of rate cut cycle in January-March 2013," said Moses Harding, head of asset liability management at IndusInd Bank.

"A CRR cut of 25 basis points is seen certain to maintain the positive feel," he said.

The government is trying to push through more reforms, approving steps on Thursday to speed up infrastructure projects and facilitate investment into the fertiliser sector.

The Sensex, which was trading flat before the data release, was up 0.4 percent.

The partially convertible rupee was at 54.32/33 per dollar at 12:30 p.m., 0.2 percent stronger than its Thursday close of 54.46/47. It had fallen to 54.60 in the session on importer demand for dollars.

The rupee is also on course for a second week of gains out of three. (Editing by Jijo Jacob)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Pharma

REUTERS SHOWCASE

Modi's U.S. Trip

Modi's U.S. Trip

PM Modi to get rock star reception in New York.  Full Article 

Northeast Floods

Northeast Floods

Landslides and floods kill 22 in northeast India.  Full Article 

Food Subsidy

Food Subsidy

India has no plans to increase food handouts - Food Minister Ram Vilas Paswan.  Full Article 

Importing Iron Ore

Importing Iron Ore

JSW Steel to import 10 mln T of iron ore due to local shortage.  Full Article 

Mars Mission

Mars Mission

India's Mars mission a step closer to success with engine test  Full Article 

Bumper Sales

Bumper Sales

Apple sells more than 10 mln new iPhones in first three days  Full Article 

Reuters India Mobile

Reuters India Mobile

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