Wednesday, August 13, 2014

India's Inflation Rate Running at 8% But Those Holding Gold Unaffected

Slightly old news but if you weren't aware India's official inflation rate is currently 8% (see here) and the Reserve Bank of India are discussing measures including an inflation target of 6%. But with the average Indian spending up to 50% of their income on food, weather and crop yields are more likely to have influence on the inflation rate than a few guys at the RBI leaning on financial levers.

Interesting to note that those Indians that choose to save in the local INR currency are down 8% (less any interest earned after tax - one 1week rates are 4%). Versus those who saved in gold whom are even (gold is up 8% in INR this year - see table)

Aug. 13 (Bloomberg) -- India’s consumer-price inflation quickened more than economists estimated, adding pressure on central bank Governor Raghuram Rajan to keep interest rates elevated even after factory output slowed. Haslinda Amin has more on "First Up."