...........Lower inflation has been possible partly because of the base effect: in December 2010 inflation had touched 9.45 per cent. Manufactured goods inflation remains elevated. All these will no doubt weigh with the RBI when it unveils the next instalment of the credit policy early next week. After hiking the rates more than a dozen times over a period of 18 months, it paused in December amidst slowing industrial production. It is doubtful that the recent good news, by themselves, will help the RBI resolve its dilemma, whether the interest rates should be cut or left untouched.
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