The rupee bounced back by 26 paise to end at 59.93 against the American currency on Friday as exporters and some banks sold dollars.
After falling for two weeks in a row, inflation once again firmed up marginally to 6.10 per cent for the week ended February 24 against 6.05 a week ago.
If credit is not going to flow in response to a policy rate cut, while inflationary pressures, as well as expectations, may be stoked, a rate cut may not be appropriate at this point
The WPI has been in the negative zone since November.
The previous low was recorded at 5.69 per cent for the week ended February 23, 2008. The index of food articles group declined by 0.7 per cent as prices of jowar fell by five per cent, fruits and vegetables by three per cent, eggs and bajra by one per cent each.
Oil and select auto heavyweights bore the brunt of selling pressure; ONGC, RIL, Tata Motors, M&M key losers.
Stock market barometers Sensex and Nifty ended marginally higher on Monday as rise in wholesale inflation capped early gains despite a positive trend in global markets. The 30-share index settled 32.02 points or 0.05 per cent higher at 60,718.71 with half of its constituents ending in green. The broad based Nifty edged up 6.70 points or 0.04 per cent to close at 18,109.45.
'The finance ministry and the RBI will never admit to the difficulties in the economy because if they do so, it will adversely impact the financial markets, etc.' 'They like to present a rosy picture that everything is fine and under control.'
Rajan had cautioned against any deviation from the fiscal discipline path.
Inflation fell below the five per cent mark to stand at 4.85 per cent for the week ended May 26 from 5.06 per cent in the previous week, as the prices of essential food items like pulses and fruits and vegetables declined.
Some say the MPC will raise the rate, while others are of the view that there is already de facto interest rate tightening through rising bond yields, which might prompt the central bank to go for a pause.
The rupee resumed lower at 61.15 per dollar as against the last weekend's level of 61.07 at the Interbank Foreign Exchange market and hovered in the range of 61.15 and 61.28 before quoting at 61.24 per dollar at 1030 hours.
The chief statistician feels there should be a rebound after companies integrate and adopt the GST system
If imputed inflation for April and May is used, then you have inflation of over 6 per cent for two consecutive quarters, which is a worrying signal for the RBI.
To cut interest rates, the central bank head has to open up a debate on inflation target revision.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
The government is working towards further review and simplification of the foreign direct investment (FDI) policy to facilitate the proposed initial public offering (IPO) of the Life Insurance Corporation (LIC), Department for Promotion of Industry and Internal Trade (DPIIT) secretary Anurag Jain said on Thursday. The final decision will be taken by the Cabinet. The industry department is working together with the finance ministry's department of financial services (DFS) and department of investment and public asset management (DIPAM) towards a successful listing of the life insurer on the domestic bourses, which is expected to be the largest in India.
Top gainers in the Sensex pack included ICICI Bank, Infosys, Bajaj Finance and HDFC Bank, rising up to 2.67 per cent.
CPI-based inflation on a (year-on-year) basis has come down from 8.59 per cent in April 2014 to 7.80 per cent in August 2014.
Growth in China's consumer inflation slowed than market expectation to 1.6 per cent in September, the lowest since January 2010, according to the official data released on Wednesday.
It would be beneficial for the economy to hold on to high interest rates till inflation numbers are under control.
It is unlikely that the RBI will drop rates until the inflation rate drops below five per cent.
After unseasonal rains, supply disruptions and pandemic-induced woes pushed retail inflation well over the Reserve Bank's comfort zone in 2020, the scenario is likely to stay that way at least in the short term as economic recovery slowly gains foothold. For most part of this year, pricier food items pushed the retail inflation, based on Consumer Price Index (CPI), higher in the range of 6.58-7.61 per cent, except for March when the reading was 5.91 per cent. Experts believe retail inflation is likely to average around 6.3 per cent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors.
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Food and fuel inflation in India have remained high for several years, the paper said, adding to durably reduce the current high inflation, the monetary policy stance needs to remain tight for a considerable length of time.
The government has taken a number of steps to stem the depreciation of rupee including moderation in demand of non-essential imports and enhancing supply of capital flows, Finance Minister P Chidambaram said.
WPI inflation even breached psychological level of 0% in Nov.
Industry bodies called for implementation of measures announced in the Budget to arrest inflation, saying these would pave the way for a stable inflation regime.
After fighting inflation for more than two years, Reserve Bank of India (RBI) Governor Duvvuri Subbarao finally managed to bring it below the five per cent level - the tolerance level of the central bank - in FY14.
The survey showed firms passed on a greater cost burden to consumers. Prices charged rose at their fastest pace since October.
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Narrowing of the current account deficit will help arrest depreciation of the rupee and ease inflation concerns, industry groups said.
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India's economy grew 4.7 per cent in 2013-14, following an expansion of 4.5 per cent in 2012-13. In the fourth quarter of 2013-14, growth remained subdued at 4.6 per cent, mainly due to a decline in manufacturing and mining output.
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The subdued labour market is likely to recover.
The rupee has depreciated 2.35 per cent in the past three months and one per cent in the past month, despite strong capital flows and falling oil prices.
The Reserve Bank has taken some steps to shore up the domestic currency.
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The government on Tuesday announced a host of measures to tame inflation, which had soared to a five-month high of 6.01 per cent in May.
Infosys, Wipro and HUL among the top losers for the day.
Retail inflation remained above the RBI's comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect, the government data showed. The marginal slippage in the Consumer Price Index (CPI)-based inflation was noticed despite little firmness witnessed in the food inflation which inched up to 5.15 per cent in June from 5.01 per cent a month ago. Retail inflation based on Consumer Price Index (CPI) was 6.3 per cent in May 2021 and 6.23 per cent in June 2020.
Infosys was the top gainer in the Sensex pack, closing 7.20 per cent higher as investors cheered its financial results. The IT major posted better-than-expected 5.3 per cent rise in its June quarter net profit, and raised revenue growth forecast for the current fiscal.
RBI is closely monitoring monsoon.
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