Food inflation has fallen to below 10% in late February. The food price index rose just 9.52% in the period to 26 February. In the week before, it had gone up 10.39%. The latest slowdown in food inflation was led by a fall in potato prices. Meanwhile, the RBI is going to review its policy rates on 17 March. On Thursday its governor D. Subbarao said the RBI was trying to deal with the challenges of both growth and inflation. He pointed out that while policy rates had to be hiked to contain inflation, they also needed to be low enough to promote growth.
In related news, new figures from the government show an unexpected surge in India’s overseas trade. The commerce ministry says exports shot up a full 50% to $23.6 billion. Imports meanwhile grew 21.2% to $31.7 billion. The new numbers come with a warning. Commerce secretary Rahul Khullar says the import numbers aren’t reliable because of technical glitches. His ministry has promised more reliable data by the end of the fiscal. Khullar also said special economic zones are seeing a rise in exports and that there could be another increase in March.
And finally, Indian markets fell on Thursday, after bad news from the Middle-East a and weak trade data from China. The Sensex lost 142 points to 18,328. And the Nifty tumbled 37, to 5,494.