India’s annual consumer price inflation remained steady in September from the previous month, but hopes of a rate cut by the Reserve Bank of India remain bleak as it expects higher inflation in coming months.
India’s annual consumer inflation (CPI) in September rose to 3.28 percent from a year earlier, government data showed on Thursday.
Analysts polled by Reuters had expected September’s CPI inflation rate would edge up to 3.60 percent from August’s downwardly revised 3.28 percent.
Earlier this month, the RBI left interest rates unchanged, after cutting the key rate by 25 basis points in August, while raising its retail inflation projection for October-March to a range of 4.2 to 4.6 percent, and lowered its economic growth estimates.
Analysts said the chances of a rate cut were bleak as higher sales during India’s long festival season that begins next week, coupled with higher petrol and diesel prices, could feed into broader prices.
“Aside from volatile food and fuel prices, core inflation is likely to accelerate,” said Shilan Shah, an economist at Capital Economics in Singapore.
“There is also a risk that excessive liquidity in the banking sector could seep into inflation.”