INSUBCONTINENT EXCLUSIVE:
Wholesale price inflation probably rose to 4.90% in September from 4.53% in August.Retail inflation likely sped up in September on higher
food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the Reserve Bank of India, a Reuters poll
found.The central bank last week held interest rates unchanged, surprising many market watchers who anticipated a third consecutive hike,
but shifted its stance from "neutral" to "calibrated tightening" in a nod to pricing pressures.The median of 45 economists in the poll taken
3-9 showed inflation was expected to have accelerated to the central bank's medium-term target of 4.00 percent last month from a year ago,
higher than August's 10-month low of 3.69 percent.Forecasts ranged from 3.60 percent to 4.70 percent, with over 40 percent of economists
expecting inflation to rise above the RBI's target, almost one third forecast it to fall below target and the remaining 11 said it would
be bang on 4.00 percent."Consumer price inflation is likely to have risen in September, in large part because the recent sharp fall in food
inflation appears to have reversed," said Shilan Shah, a senior economist at Capital Economics."Core inflation is likely to have remained
Despite the RBI keeping rates on hold last week, the tightening cycle still has a little bit further to run."Although food inflation has
quickened it was subdued enough to offset some of the pain coming from the double whammy of a weak currency and rising oil prices.The rupee
tumbled to a new low of 74.395 against the United States dollar on Tuesday and Brent crude, costliest import item, hit a four-year high
this month.According to a separate Reuters poll, the struggling rupee, which has lost over 16 percent against the greenback this year so
If the RBI takes care of liquidity, then other concerns should gradually subside," said Shashank Mendiratta, economist at ANZ Bank."The RBI
to that extent has taken steps to infuse liquidity by announcing OMOs (open market operations) and similar measure will be taken up through
this fiscal year."Wholesale price inflation probably rose to 4.90 percent in September from 4.53 percent in August.The poll forecast
industrial output expanded 4.0 percent in August from a year ago compared with 6.6 percent in July.That prediction was probably based on
slower output growth from eight core industries - accounting for nearly 40 percent of total industrial production - with annual production
edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
