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WPI inflation at record low of (-)4.95% in August: India Inc says RBI should go for 50bps interest rate cut
The Wholesale Price Index-based inflation has fallen to (-)4.95 per cent in August. Continuing the deflationary trend for the 10th month in a row, the WPI inflation in August went below (-)4.05 per cent, the WPI inflation in July. Low fuel price is seen as the primary reason behind this fall in inflation.

Reacting to the August WPI inflation, industry body CII's Director General, Chandrajit Banerjee raised demand that key interest rates like repo-rate should be cut by 50 basis points by the RBI in its forthcoming monetary policy review. He said that currently the price pressures were at record low.

"Given that CPI inflation has also been declining, the RBI needs to reduce interest rates sharply to drive a recovery in demand. CII expects the RBI to reduce interest rates by 50 basis points in the forthcoming policy with statements supporting further easing in the near future," said Chandrajit Banerjee in a press statement.

Industry association FICCI has also termed the present deflationary situation as an ideal condition for the Reserve Bank of India to announce a bigger cut in key interest rates.

FICCI President Jyotsna Suri in a statement said, "Under the present circumstances, it would be most appropriate for the Reserve Bank of India to give weight to growth considerations and announce a deeper cut in the policy rate on September 29, 2015."

Suri expressed hope that the RBI and the Banking community would coherently work towards lowering of lending rates.

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