Central bank in neutral may be reading India's prices wrong

Mumbai

AS India's monetary policy committee begins its two-day meeting, the inflation-targeting central bank may be using flawed price measures as the basis for its swing to neutral policy.

All 50 economists in a Bloomberg survey predict the Reserve Bank of India will leave the repurchase rate unchanged at 6.25 per cent on Thursday, as price pressures appear to be picking up. Governor Urjit Patel is concerned about core inflation - stripping out volatile food and fuel costs - which he says is worryingly sticky.