Too early to celebrate falling retail inflation: RBI official

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SME Times News Bureau | 08 Nov, 2014
Putting a dampner on rate cut hopes, Reserve Bank of India's Deputy Governor, H R Khan, Friday cautioned industry and market players against "celebrating the falling retail inflation too early".

"Inflation still has a long way to go in terms of input costs, wage burden, food prices. There are structural issues," Khan said at an event organised by the Confederation of Indian Industry.

Speaking at an event organised by the Confederation of Indian Industry, he added that rural areas were also seeing large inflation.

Markets have been expecting a repo rate cut from the RBI after consumer price-led inflation fell to 6.46 per cent in September, its lowest since the series was started in January 2012.

Finance Minister Arun Jaitley and industry captains have also been asking the RBI in recent days to consider a rate cut.

The yield on the 10-year benchmark bond, which has been falling in the last five trading sessions, rose on Friday after Khan's statement.

Meanwhile, the 30-scrip Sensex of the S&P Bombay Stock Exchange, which opened at 27,902.71 points, closed trade at 27,886.50 points (at 3.30 p.m.), down 29.38 points or 0.11 percent from the previous day's close at 27,915.88 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day's trade in the red. It was down 0.02 percent or 1.30 points at 8,337 points.