India's household inflation expectations up for 3rd straight quarter

[MUMBAI] Inflation expectations by Indian households rose for a third consecutive quarter, a survey conducted by the Reserve Bank of India showed on Tuesday.

Households expect inflation to touch 10.1 per cent within three months, according to the RBI survey conducted in June, higher than 9 per cent in the previous survey in March.

The one-year inflation expectation by households was at 10.3 per cent, compared with 9.1 per cent in the previous survey.

India last experienced double-digit inflation in November 2013.

The survey came on the same day the RBI kept interest rates on hold, as it continues to track inflation among other factors, including "a sustained hardening" of inflation outside of food and fuel that it described as "most worrisome".

RBI Governor Raghuram Rajan, in a call with analysts on Tuesday, said the RBI was monitoring the rate of change of households' inflation expectations rather than the absolute numbers.

These expectations are rising even as India's consumer price inflation dropped to 5.4 per cent in June.

REUTERS