Expert Views – Consumer inflation in November eases to 3.63 percent | Reuters

MUMBAI India's annual consumer price inflation eased to a weaker-than-expected 3.63 percent in November, its lowest level in two years, helped by a sharp cooling in food prices, government data showed on Tuesday. Economists surveyed by Reuters had expected annual retail inflation to come in at 3.90 percent last month, compared with 4.20 percent in October.COMMENTARY ADITI NAYAR, ECONOMIST, ICRA "I would argue that the decline from last month is primarily reflecting a favourable base effect, and to a smaller extent, subdued demand after the note ban."For food inflation in particular, our view is that it's more of a base effect-led decline."I would still expect a gradual uptrend (in inflation trajectory) over the next couple of months and that it would remain under the 5 percent target throughout Q4.""Our view is that there is only room for one more rate cut of 25 basis points, given our estimate of the inflation trajectory, and the fact that there has been no change in the real interest rate assumption that the MPC (monetary policy committee) has announced this time.

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