Indian Inflation Quickens on Food Costs Before Fed's Rate Review
Fed's Rate Path in Focus Now That March Is Certain
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India’s inflation accelerated more than predicted due to higher food prices, supporting the central bank’s decision to abandon its accommodative policy stance before an expected increase in U.S. interest rates.
The data risks spurring the Reserve Bank of India’s concern on inflation, with the U.S. Federal Reserve expected to tighten on Wednesday and the International Monetary Fund saying India must be ready to do the same if price pressures pick up. The RBI’s staff said in a report on Friday that while effects of Prime Minister Narendra Modi’s demonetization have mostly worn off, the cash squeeze hasn’t had much impact on core inflation, which strips out volatile food and fuel costs.