Indian interest rates dropped in early 2016 and treasury yields fell after demonetisation. Retail inflation has fallen in the last four months. However, the Reserve Bank of India (RBI) has held the policy rate steady in the last two reviews despite the falling Consumer Price Index (CPI). Analysts now expect RBI to maintain status quo until September 2017.
The January CPI was 3.17 per cent higher than a year ago , and that's the lowest rate in at least five years. The December CPI was at 3.4 per cent year on year. But, the CPI construction is such that RBI
