Wholesale inflation also accelerated, indicating pipeline pressures are building up just two weeks after the RBI cut its benchmark rate to a seven-year low and urged the government to help spur investment. Investors who bought the rupee by borrowing dollars have earned some 10% this year, the highest carry returns among Asian currencies. “Demand-driven inflation is still fairly subdued and that should worry policymakers,” said Rupa Rege Nitsure, chief economist at L&T Finance Holdings Ltd in Mumbai. However, when compared with global peers like Indonesia, India’s inflation is still relatively low and Modi’s chief economic adviser Arvind Subramanian has been arguing that there’s a structural shift lower. “From now on, India’s inflation rate is going to rise,” said Devendra Kumar Pant, chief economist at India Ratings & Research.

Source: Mint August 15, 2017 02:37 UTC