India's central bank maintained its policy rate at 8.0 percent along with its cash reserve requirements, as expected, saying "further policy tightening in the near term is not anticipated at this juncture" if inflation continues to decline as expected.
The Reserve Bank of India (RBI), which raised its rate in January for the third time since September 2013, said retail price inflation eased for the third month in a row in February due to sharp disinflation in food prices though prices of fruits, milk and product have started to firm.
However, vegetable prices have entered their seasonal trough and further softening is unlikely, the RBI said, adding that there are still risks to the bank's central forecast of 8 percent CPI inflation by January 2015 from a less-than-normal monsoon, uncertainty about administered prices, the outlook for fiscal policy and international commodity prices.
"The Reserve Bank's policy stance will be firmly focussed on keeping the economy on a disinflationary glide path that is intended to hit 8 percent CPI inflation by January 2015 and 6 percent by January 2016," the RBI said.
India's retail price inflation fell to 8.1 percent in February from 9.87 percent in January and 11.16 percent in December while wholesale prices fell to 4.68 percent from 5.05 percent and 6.4 percent during the same period.
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The Reserve Bank of India (RBI), which raised its rate in January for the third time since September 2013, said retail price inflation eased for the third month in a row in February due to sharp disinflation in food prices though prices of fruits, milk and product have started to firm.
However, vegetable prices have entered their seasonal trough and further softening is unlikely, the RBI said, adding that there are still risks to the bank's central forecast of 8 percent CPI inflation by January 2015 from a less-than-normal monsoon, uncertainty about administered prices, the outlook for fiscal policy and international commodity prices.
"The Reserve Bank's policy stance will be firmly focussed on keeping the economy on a disinflationary glide path that is intended to hit 8 percent CPI inflation by January 2015 and 6 percent by January 2016," the RBI said.
India's retail price inflation fell to 8.1 percent in February from 9.87 percent in January and 11.16 percent in December while wholesale prices fell to 4.68 percent from 5.05 percent and 6.4 percent during the same period.
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by InformedTrades via InformedTrades
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