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Growing divide between WPI, CPI strains indebted companies

Firms worried central bank tying monetary policy too much to consumer inflation

Reuters  |  Mumbai 

Indian firms battling towering debts are calling for more interest rate cuts as they worry the central bank is tying monetary policy too much to consumer inflation and ignoring the longest streak of wholesale price falls on record. Reserve Bank of India (RBI) Governor Raghuram Rajan in 2014 started using consumer prices as the bank's key inflation measure to focus policy on ordinary Indians. This year, the link between consumer prices and monetary policy became even stronger as the RBI formally adopted an inflation-targeting regime. But a growing divide between consumer and ...

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First Published: Thu, July 09 2015. 07:00 IST