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India Inflation Eases More Than Expected; Slowest on Record

India’s inflation grew at its slowest pace on record even as the central bank unexpectedly held interest rates in its monetary policy review last week.

Key Points
  • Consumer prices rose 3.17 percent in January from a year earlier, the Statistics Ministry said in a statement in New Delhi on Monday

  • That’s slower than the 3.24 percent median estimate in a Bloomberg survey of 32 economists

  • Food prices rose 0.53 percent compared with a 1.37 percent increase the previous month

  • Today’s number was below the 3.27 percent rate recorded in Nov. 2014

Big Picture

Governor Urjit Patel kept the benchmark repurchase rate unchanged at a six-year low of 6.25 percent for a second straight meeting last week and signaled that its interest-rate easing cycle is coming to an end. However, the central bank forecast a sharp recovery in growth during the year through March 2018, helped by a rebound in consumption that has been hurt by Prime Minister Narendra Modi’s unprecedented cash ban.


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Basil Crozier - Chair


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