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Inflation Expected to Pick Up in November

Inflation most likely picked up in November as a feeble currency pushed up the price of importation of fuel, adding to the challenges facing a central bank torn between fighting rising prices and an economic slowdown, a Reuters poll showed.

Bendy economic growth has provoked calls from the government and business leaders for the Reserve Bank of India to cut interest rates, but it has so far discarded them, saying prices are yet rising too quick to relieve policy.

"The WPI increase likely augmented slightly despite a favorable support. Turn down in the Indian rupee over the month more than equalize the fall in universal commodity prices, and may have supported imported inflationary stresses," said Abhishek Upadhyay, an economist at Axis Bank. Basic articles like food and fuel create up more than a third of the wholesale price index, and their lofty cost has kept rise inflexibly strong. The information will be released on Friday. The economy unlimited its crash into the three months to September, mounting an annual 5.3 percent, and is headed for its weakest full-year escalation in a decade.

In an unanticipated move, RBI Governor Duvvuri Subbarao presented quite explicit policy guidance at the October meeting, saying the RBI might relieve policy in January to March, the last quarter of the financial year, when it anticipates inflationary pressure to ease.

A headline price rises rate of 5 percent is usually perceived as the RBI's calm level and it has continued above 7 percent through this year, even though lower than the 9.5 percent it averaged in the earlier two years.

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