India’s inflation cools to lower-than-expected 4.31% in January

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

India’s inflation cools to lower-than-expected 4.31% in January

India’s central bank held its key interest rate for a seventh straight policy meeting on Friday as growth in the economy is expected to remain robust while inflation stays above the 4% target.

Bloomberg | Bloomberg | Getty Images

India’s headline inflation dipped year-on-year for a third straight month to 4.31%, providing more room for monetary easing after the country’s central bank cut rates for the first time in nearly five years last week.

The January reading was the lowest since August 2024, and came below expectations of 4.6% from economists polled by Reuters.

A drop in inflation could clear the way for another rate cut by the Reserve Bank of India, which slashed the repo rate to 6.25% from 6.5% on Friday in its bid to boost a slowing economy.

This is the hidden content, please

• Sign In
• or
• Sign Up

Get a weekly roundup of news from India in your inbox every Thursday.
Subscribe now

The RBI is currently facing a dilemma as it seeks to prop up growth in Asia’s third-largest economy, but rate cuts aimed at stimulating growth could weaken the rupee, which hit a record low earlier this month and has been under pressure due to a stronger dollar.

The Indian currency, however, strengthened over that past two days, reportedly

This is the hidden content, please

• Sign In
• or
• Sign Up

by the central bank.

RBI Governor Sanjay Malhotra said

This is the hidden content, please

• Sign In
• or
• Sign Up

that the decision to cut rates was owed to a decline in inflation, which is expected to further moderate in 2025 and 2026 toward the bank’s target of 4%.

This is the hidden content, please

• Sign In
• or
• Sign Up

is expected to come in at 6.4%, according to government estimates, sharply lower than the 8.2% a year earlier. The RBI also cut its growth forecast for the current fiscal year to 6.4% — matching the government

This is the hidden content, please

• Sign In
• or
• Sign Up

. The bank had pegged growth at 6.6% in its previous estimate.

“These growth-inflation dynamics open up policy space for the MPC [monetary policy committee] to support growth, while remaining focused on aligning inflation with the target,” the central bank said Friday.

This is the hidden content, please

• Sign In
• or
• Sign Up

#Indias #inflation #cools #lowerthanexpected #January

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up