banner_ad

IIP, inflation to decide RBI move

Last updated: 13 October 2011


Two sets of data to be released this week - industrial output growth for August and consolidated monthly inflation for September - would largely determine the Reserve Bank of India's (RBI's) next move on interest rate hikes. Policy makers are facing a harsh dilemma: a slew of fiscal and monetary measures to cure inflation has not tamed prices but cast side effects on growth.

 

The government will announce the factory output growth figures for August on Wednesday and release wholesale prices based inflation data for September two days later.

 

With India's inflation rate racing towards worrisome double-digit levels, all eyes are on the RBI, on whether it may announce a pause in its interest rates hike cycle later this month when it presents the quarterly monetary policy review on October 25.

 The wholesale price index (WPI)-based inflation stood at 9.78% in August, the highest in 13 months, fuelled by costlier food, fuel and manufactured products.

 "Amidst mounting global uncertainties, it is unlikely for the RBI to hike repo rates at this juncture," said a recent research report by BNP Paribas.

 India's factory output growth in July grew by 3.3%, the slowest in 21 months, latest data showed on Monday, mirroring signs of an imminent industrial slowdown as rising input costs and costlier borrowing squeeze corporate profitability, forcing them to defer investments.

 The RBI has raised the repo rate by 12 times in the past 18 months to cool prices.

 A higher repo raises banks' borrowing costs, which in turn would raise interest rate on final home, auto and corporate loans.

 


CCI Pro



News posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.


Comments



More »


Popular News





CCI Pro
Meet our CAclubindia PRO Members




Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
16 May 2026
Audit clerk

mgirt & co

Bengaluru

CA Inter

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details
Company
22 May 2026
Audit assistant

Displayandbeyond

Mumbai

CA

View Details
Company
11 May 2026
CA Dropout

Patron Accounting LLP

Pune

CA Inter

View Details