By -
Sep 18, 2012
Indian consumer prices rose at the
fastest pace in three months in August as costs of vegetables
and sugar increased.
The consumer-price index climbed 10.03 percent from a year earlier, compared with a 9.86 percent advance reported earlier for July, the Statistics Office said in New Delhi today.
The Reserve Bank of India kept interest rates unchanged yesterday to damp inflation risks from a drop in the rupee and a below-average monsoon that threatens to crimp farm output. At the same time, it cut the amount of deposits banks must set aside as reserves to support lending following the government’s biggest push to revive growth since 2009.
“Inflation remains an overriding concern despite the government’s policy initiatives,” Sujan Hajra, a Mumbai-based economist at Anand Rathi Financial Services Ltd., said before the release. “The Reserve Bank will ease liquidity through buying bonds and cutting the cash reserve ratio rather than cutting policy rates.”
The rupee, which has tumbled about 12 percent against the dollar in the past 12 months, fell 0.5 percent to 54.305 per dollar at 11:19 a.m. in Mumbai. The BSE India Sensitive Index (SENSEX) eased 0.1 percent, while the yield on the 8.15 percent government bond due June 2022 rose one basis point to 8.17 percent from 8.16 percent before the data release.
Vegetable prices climbed 20.79 percent last month from a year earlier, today’s statement showed. Sugar rose 17.51 percent, while pulses gained 16.04 percent.
India boosted diesel tariffs last week to pare its fiscal deficit and allowed more foreign investment in the economy, the most extensive policy overhaul of Prime Minister Manmohan Singh’s previously gridlocked second term.
To contact the reporter on this story: Tushar Dhara in New Delhi at tdhara1@bloomberg.net.
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net.
The consumer-price index climbed 10.03 percent from a year earlier, compared with a 9.86 percent advance reported earlier for July, the Statistics Office said in New Delhi today.
The Reserve Bank of India kept interest rates unchanged yesterday to damp inflation risks from a drop in the rupee and a below-average monsoon that threatens to crimp farm output. At the same time, it cut the amount of deposits banks must set aside as reserves to support lending following the government’s biggest push to revive growth since 2009.
“Inflation remains an overriding concern despite the government’s policy initiatives,” Sujan Hajra, a Mumbai-based economist at Anand Rathi Financial Services Ltd., said before the release. “The Reserve Bank will ease liquidity through buying bonds and cutting the cash reserve ratio rather than cutting policy rates.”
The rupee, which has tumbled about 12 percent against the dollar in the past 12 months, fell 0.5 percent to 54.305 per dollar at 11:19 a.m. in Mumbai. The BSE India Sensitive Index (SENSEX) eased 0.1 percent, while the yield on the 8.15 percent government bond due June 2022 rose one basis point to 8.17 percent from 8.16 percent before the data release.
Vegetable prices climbed 20.79 percent last month from a year earlier, today’s statement showed. Sugar rose 17.51 percent, while pulses gained 16.04 percent.
India boosted diesel tariffs last week to pare its fiscal deficit and allowed more foreign investment in the economy, the most extensive policy overhaul of Prime Minister Manmohan Singh’s previously gridlocked second term.
To contact the reporter on this story: Tushar Dhara in New Delhi at tdhara1@bloomberg.net.
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net.
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