“India’s inflation slowed less than estimated in March as food and fuel prices rose, limiting room for cuts in interest rates to bolster a weakening economy.
The benchmark wholesale-price index advanced 6.89 percent from a year earlier, the commerce ministry said in a statement in New Delhi today, compared with a 6.95 percent climb in February and the median 6.65 percent estimate in a Bloomberg News survey of 33 economists.
The Reserve Bank of India, which reviews policy tomorrow, has signaled readiness to lower borrowing costs for the first time since 2009 to boost domestic demand as Europe’s debt crisis and a slowdown in China dim the global outlook. It has also flagged the risk of a revival in price pressures because of the rupee’s slide, costlier oil and the fiscal gap.
“Inflation worryingly could be sticky, and the recent comments by the RBI suggest it is growing more and more concerned by downside risks,” said Vishnu Varathan, an economist at Mizuho Corporate Bank Ltd. in Singapore. The central bank will move “gradually” and cut no more than 25 basis points at any one meeting and 100 basis points in total in the year through March, he said…”
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