Inflation moderated to its slowest pace in 10 months in November, fuelling expectations of an interest cut but the sharp revision to previous month’s reading is likely to dash hopes of any easing in tight monetary policy soon. Data released by the commerce ministry showed inflation rate, as measured by the wholesale price index, rose to 7.24% — slower than the previous month’s 7.45% and 9.46% in the same year earlier month.
But price pressures still remained a risk. The government revised upwards the September reading to 8.07% from the previously reported 7.81%. Policymakers said the moderation in inflation augured well for the economy and expected it slow further in the months ahead.
The Reserve Bank of India (RBI) will review monetary policy on December 18. While the RBI has indicated that rates may ease, it has said that the decision would be influenced by the growth inflation dynamics as they unfold.Some economists said RBI is likely to postpone its rate easing until the January-March quarter.
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