INDIA INFLATION DROPS TO THREE-YEAR LOW IN MARCH

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April 15, 2013

NEW DELHI - India’s wholesale price inflation (WPI) fell sharply to 6.0% y/y from 6.8% in February, its lowest since November 2009 amid a broad-based let up in price pressures. Core inflation eased for the seventh successive month to 3.4% y/y from 3.8% previously, signalling continued weak pricing power. BBVA Bank says the latest inflation numbers coupled with recent disappointing activity indicators, support the case for another 25 bps cut in the repo rate by the Reserve Bank of India at its next policy meeting on May 3, following similar cuts in its last two policy meetings.