Menu

Search

  |   Central Banks

Menu

  |   Central Banks

Search

FxWirePro Poll: Subdued inflation and negative demonetisation effect to pressurize RBI for rate cut in February

India’s inflation continued to remain subdued during the month of November, exerting deeper pressure on the Reserve Bank of India (RBI) to undertake easing policy in the next 2-day bi-monthly monetary policy scheduled to be held on February 7, an FxWirePro Poll showed Monday. 9 out of 10 economists polled at FxWirePro remained optimistic for a RBI rate cut in February 2017.

India’s consumer prices tumbled in November because of weak food prices. Consumer price inflation in India slowed to 3.63 percent year-on-year in November, owing to the drops in prices of food. The downward surprise was mainly because of fruits and vegetables.

Additionally, India’s wholesale price inflation fell during the month of November, at the slowest pace in five months. However, it came in higher than what market participants had priced in initially.

India's wholesale prices rose 3.15 percent year-on-year in November, its slowest pace in five months, data released by the Indian Ministry of Commerce and Industry showed Wednesday. The data compared with a 3.12 percent annual rise forecast by economists in an FxWirePro poll.

Moreover, the country’s inflation is anticipated to have eased further in coming months due to the failure of demonetisation. This masterstroke brought in a pool of electronic transactions that deprived many of hand-to-hand cash exchanges, thus leaving the citizens in a wide array of lower spends overall.

The lower spread of cash transactions, coupled with a maximum limit on ATM withdrawals has pressurised the prices of many retail commodities, including luxuries and real estate prices as well.

"The RBI is expected to slash its benchmark repo rate by 25 basis points to 6.00 percent, following a decline in inflation expectations," said Chintan Master, Director, Finrex in an exclusive interview with FxWirePro last month.

The 2017-18 Union Budget, expected to be unveiled by February 1, 2017 is likely to incorporate a slash in the income tax bracket as well, allowing consumers to combat the negative effects of demonetization. The policy implementation is expected to boost consumer spending, allowing door for some recovery in inflation expectations.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

September 20 11:00 UTC Released

USMBA 30-Yr Mortgage Rate

Actual

4.04 %

Forecast

Previous

4.03 %

September 20 11:00 UTC Released

USMortgage Refinance Index

Actual

1497.8 %

Forecast

Previous

1636.8 %

September 20 14:00 UTC 6363m

USExisting Home Sales

Actual

Forecast

5.46 Mln

Previous

5.44 Mln

September 20 14:00 UTC 6363m

USExist. Home Sales % Chg

Actual

Forecast

0.3 %

Previous

-1.3 %

September 20 14:30 UTC 9393m

TRCentral Govt Debt Stock*

Actual

Forecast

Previous

817.1 Bln TRY

September 20 15:30 UTC 153153m

BRForeign Exchange Flows*

Actual

Forecast

Previous

-1.251 Bln USD

September 21 08:30 UTC 11731173m

GBPSNB, MM GBP

Actual

Forecast

Previous

-0.76 Bln GBP

September 21 08:30 UTC 11731173m

GBPSNCR, MM GBP

Actual

Forecast

Previous

-3.912 Bln GBP

September 21 08:30 UTC 11731173m

GBPSNB Ex Banks GBP

Actual

Forecast

7.100 Bln GBP

Previous

-0.184 Bln GBP

September 21 12:00 UTC 13831383m

BRIPCA-15 Mid-Month CPI

Actual

Forecast

0.15 %

Previous

0.35 %

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.