More India rate cuts seen as core inflation eases

MUMBAI: India’s headline and core inflation rates are set to converge in the coming months as the economy slows, increasing the chance of more interest rate cuts.

The core measure – which strips out volatile fuel and food costs – has remained sticky at around 6% and is a key reason economists cautioned against more rate cuts after last week’s surprise easing. It softened to 5.4% in January, and Pranjul Bhandari, chief India economist at HSBC Holdings Plc, sees it slowing to as low as 4% this year.