India’s consumer-price growth eased more than analysts estimated in January and factory output fell in December following an increase in interest rates as central bank Governor Raghuram Rajan fights Asia’s fastest inflation.
An Indian central bank committee proposed adopting a 4 percent consumer-price-inflation target by 2016 as part of a sweeping monetary-policy overhaul, a shift that signals elevated interest rates if adopted.
India’s 10-year government bonds headed for their best week this month after the central bank unexpectedly refrained from raising interest rates. The rupee weakened as the Federal Reserve said it will pare stimulus.
Gains in consumer spending probably continued to drive the U.S. economic expansion at the end of 2013 as sales at non-auto retailers climbed during the holidays. Elsewhere, inflation in the U.K. probably held at a four-year low in December, Brazil’s central bank may slow the pace of monetary tightening, and Australia’s employment growth cooled.
India’s 10-year bonds completed a second week of gains, the longest winning streak since October, amid speculation cooling inflation will prompt the central bank to hold interest rates at a policy review this month.
India’s rupee rose, halting a two-day loss, after the current-account deficit widened by less than economists predicted, helping offset concern that a U.S. government shutdown will damp capital inflows.