Today's inflation numbers will be the key to RBI's monetary policy action on March 19 and the market's course today. WPI is expected to fall marginally to 6.5% vs 6.6% in January 2013. Here are the five things you must know before inflation numbers are out:
1. Indian equity market has underperformed its peers, selling out after January CPI inflation came in above 10 percent.
2. Food inflation remained sticky. This component was the chief contributor to high CPI inflation. RBI's dilemma has been compounded due to the widening gap between CPI and WPI
3. Reserve Bank of India governor D Subbarao, while addressing students in London on Wednesday, said inflation is still high and stubborn and an above 6-percent inflation would justify monetary tightening. He remained concerned with a decelerating growth.
4. RBI estimates put threshold inflation in 4-6 percent range
5. Former RBI governor and chairman of Prime Minister's Economic Advisory Council, C Rangarajan had recently said India faces stagflation, a state of high inflation and poor growth rate.
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