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Indian Inflation Priority for Government and Central Bank

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India’s new government has made fighting inflation its top priority, easing concern about the potential for conflict with the country’s hawkish central bank.

Outlining Prime Minister Narendra Modi’s economic plan to parliament earlier this week, President Pranab Mukherjee said the government would address bottlenecks that have caused food prices to rise more quickly in India than in other major economy.

Annual consumer price inflation in India, Asia’s third biggest economy, hit a three-month high of 8.59 percent in April – driven mainly by higher food prices.

The Reserve Bank of India has hiked interest rates three times since September to curb inflation and there was some debate before Modi’s landslide election win last month about whether the new government would pressure the central bank to pull back from its hawkish inflation stance.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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