WPI-CPI divergence confounds RBI

.....What puzzles is the guidance: the balance of risks arising from this inflation growth dynamic leave “little space” for further easing; indeed, the dark picture of inflation and current account deficit risks presented in its macroeconomic assessment the previous day persuaded many in the market to believe that there may be “no space” for easing the next day itself! It was little surprise that stocks fell and yields rose at the inflation-speak, notwithstanding the quarter per cent interest rate cut.......

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