Arab Today, arab today india set for 12th rate hike to control inflation
Last Updated : GMT 21:47:11
Arab Today, arab today
Arab Today, arab today

India set for 12th rate hike to control inflation

Arab Today, arab today

Arab Today, arab today India set for 12th rate hike to control inflation

Beijing - AFP

India's central bank was expected to hike interest rates on Friday for the 12th time since March last year, as it opts to fight spiralling inflation despite a slowdown in the economy. Economists forecast that policymakers at the Reserve Bank of India (RBI) would raise short-term interest rates by 25 basis points when they announce a decision in financial capital Mumbai at 12:00 pm (0630 GMT). The benchmark repurchase or repo rate, at which the RBI lends to commercial banks, is currently at 8.0 percent, its highest level in nearly three years, while the reverse repo -- paid to banks for deposits -- is at an over-a-decade high of 7.0 percent. Another interest rate rise is seen as almost inevitable after inflation in August came in at 9.78 percent -- a 13-month peak, the highest for any large economy, and almost double the RBI's comfort level of 5.0 percent. "It appears premature for the RBI to step off the gas at this stage," Shubhada Rao, chief economist at private sector Yes Bank, told AFP. "Inflationary pressures are waning but are still elevated," she added. The latest inflation data were fuelled by price rises in food, fuel and manufactured goods. HSBC India chief economist Leif Lybecker Eskesen said the bank was likely to retain its tightening bias as inflation is not coming off its highs. "With this backdrop, the RBI should still consider inflation a dominant concern and notch up rates by 25 basis points (on Friday)," he said. The government and business leaders, however, hope the hawkish central bank may pause soon in raising interest rates as economic growth slows due to the relentless tightening. Finance Minister Pranab Mukherjee said on Thursday that inflation may now have peaked and "we should see a gradual moderation in monthly headline inflation". But hours after he made the statement, the Press Trust of India reported state-owned oil firms would hike petrol prices by three rupees (six cents) a litre, the fifth rise this year, to offset high international crude prices. Business groups are complaining that the rate hikes are choking economic growth, with industrial output growing just 3.3 percent year-on-year in July -- its slowest in nearly two years. Last month, India posted its slowest gross domestic product (GDP) growth in six quarters, up 7.7 percent year-on-year, as expansion was hit by the longest stretch of monetary tightening in a decade. A further rate hike -- after an unexpected 50 basis points rise in July -- means the cost of borrowing will increase and auto and property loans get costlier, impacting demand for goods and some services. Experts hope that inflation and high commodity prices could ease in coming months as global growth concerns intensify and domestic demand moderates. The government expects the economy to grow by around 8.5 percent while the central bank has forecast near eight percent growth for the fiscal year to March 2012. The RBI expects inflation to moderate to 7.0 percent by March.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today india set for 12th rate hike to control inflation Arab Today, arab today india set for 12th rate hike to control inflation

 



Arab Today, arab today
Arab Today, arab today Heart of Turkish Riviera is Alluring Seaside Escape

GMT 11:11 2017 Tuesday ,28 March

Heart of Turkish Riviera is Alluring Seaside Escape
Arab Today, arab today 5 Crafty Must-Have Limited-Budget Ideas

GMT 17:03 2017 Saturday ,25 March

5 Crafty Must-Have Limited-Budget Ideas
Arab Today, arab today Russia, Iran ink economic deals

GMT 08:03 2017 Wednesday ,29 March

Russia, Iran ink economic deals
Arab Today, arab today Media host gives priority to problems of people

GMT 07:00 2017 Tuesday ,28 March

Media host gives priority to problems of people
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Disaster costs nearly double to $175bn

GMT 10:42 2017 Tuesday ,28 March

Disaster costs nearly double to $175bn
Arab Today, arab today Campaign fights sexual harassment in Egypt

GMT 11:14 2017 Tuesday ,28 March

Campaign fights sexual harassment in Egypt
Arab Today, arab today Trump moves to roll back Obama climate measures

GMT 08:39 2017 Wednesday ,29 March

Trump moves to roll back Obama climate measures
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Mercedes, VW recall million vehicles in China

GMT 09:16 2017 Wednesday ,29 March

Mercedes, VW recall million vehicles in China
Arab Today, arab today Uber grounds self-driving cars

GMT 09:11 2017 Monday ,27 March

Uber grounds self-driving cars
Arab Today, arab today Trump poised to roll back climate protections

GMT 09:28 2017 Tuesday ,28 March

Trump poised to roll back climate protections

GMT 18:57 2017 Tuesday ,21 March

Accessories designer reveals her new collection

GMT 11:10 2017 Monday ,27 March

Trump to roll back Obama clean power plan

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures

GMT 11:55 2017 Wednesday ,29 March

Need ‘gymspiration?’ The top fun fitness bloggers

GMT 09:02 2017 Thursday ,23 March

Laptop ban sparks ire

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 05:17 2017 Wednesday ,29 March

Samsung to sell refurbished Galaxy Note 7s

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday