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India’s Inflation rises most
in more than three years
New Delhi—India’s inflation accelerated to the fastest pace in more
than three years, raising concern the central bank may increase
borrowing costs as soon as this month. Bonds fell. Wholesale prices
rose 7.41 percent in the week ended March 29 from a year earlier,
faster than the previous week’s 7 percent gain, the Ministry of
Commerce and Industry said in New Delhi today.
The median forecast of 16 analysts in a Bloomberg News survey had
been for a 7.06 percent increase. Surging commodities and food costs
globally have fanned inflation across Asia, forcing governments to
seek ways to stem price gains. In India, where the government may
decide as early as this week on measures including cement and steel
price controls, the central bank may order lenders to park more
money with it to raise the cost of funds, analysts said.
“An increase in the cash reserve ratio cannot be ruled out,” said
Prasanna Ananthasubramaniam, a fixed-income analyst in Mumbai at
ICICI Securities Ltd. “The focus of monetary policy will be on
liquidity management and stopping it from contributing to
inflation.” Indian bonds extended losses after the inflation report
was released. The price of the most-traded 7.99 percent note fell
0.25, or 25 paise per 100 rupee face amount, to 99.80 as of 10:45
a.m. in Mumbai.—AFP
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