Food Price Inflation, $2.4 Billion Government Debt Sale: India Week Ahead.

India will report food inflation data for the seven days to Sept. 11 after Farm Minister Sharad Pawar last week said the winter wheat harvest in the world’s second-biggest producer of the crop will reach a record.

An index measuring wholesale prices of farm produce rose 15.1 percent from a year earlier in the week ended Sept. 4, the highest level since July, according to data published by the Ministry of Commerce & Industry. The figures for the following week are due Sept. 23.

The Reserve Bank of India on Sept. 16 increased interest rates for the fifth time this year and said its actions have brought the “monetary situation close to normal.” Governor Duvvuri Subbarao boosted the repurchase rate to 6 percent from 5.75 percent, and the reverse-repurchase rate a half point to 5 percent, the RBI said in a statement in Mumbai on Sept. 16.

India’s benchmark stock index had its steepest weekly gain in 10 months as investors judged economic growth is robust enough to withstand higher borrowing costs. The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 4.2 percent last week to 19,594.75, its highest level since January 2008.

Gross domestic product grew 8.8 percent last quarter from a year earlier, a government report showed, the most among major economies after China and Brazil.

Rupee, Bonds

The rupee climbed to a three-month high last week on optimism the nation’s improving economy and planned share sales will spur overseas demand for local equities. The currency appreciated 1.4 percent last week to 45.845 per dollar in Mumbai, according to data compiled by Bloomberg. It earlier touched 45.795, the strongest level since June 21.

The benchmark 10-year bonds fell to the lowest level in almost two weeks after the central bank raised interest rates. The overnight call money rate climbed to 6.1 percent, the highest since March, indicating tightening of liquidity.

The yield on the 7.8 percent note due May 2020 rose 2 basis points on Sept. 17 to 7.98 percent in Mumbai, according to the central bank’s trading system. The price fell 0.10, or 10 paise per 100 rupee face amount, to 98.80.

The government will auction 110 billion rupees ($2.4 billion) of bonds this week, according to the central bank’s debt sales calendar.

Event                                             Date
India food, fuel Inflation                        Sept. 23

Source : bloomberg.com