India’s Consumer Price Inflation Falls to Record Low of 2.18 Percent
A vendor displays cloth for customers at a stall outside the Jama Masjid during the Muslim holy month of Ramadan in the Old Delhi area of New Delhi, on May 29, 2017.
Photographer: Sanjit Das/BloombergIndia’s inflation slowed to the lowest on record as food prices continued to soften, adding to expectations that the central bank will cut rates when it meets for a review in August.
Slowing inflation will give the Reserve Bank of India headroom to ease monetary policy in the months to come. Central bank governor Urjit Patel kept the benchmark repurchase rate unchanged at 6.25 percent in a policy review last week, saying the easing of price pressures may be transient. The RBI cut inflation estimates for the financial year to March 2018 after retail inflation dipped to an historic low in April. However, concerns over the possible inflationary impact of the implementation of India’s landmark national sales tax on July 1 and yet-to-be-announced salary hikes for state employees remain.