2025-03-12 11:40

Feb CPI at 3.61% vs 4.26% in Jan Feb Food inflation 3.75% vs 5.97% in Jan Vegetable prices fall in February Economists expect RBI to cut rates in April NEW DELHI, March 12 (Reuters) - India's retail inflation fell below 4% in February for the first time in six months mainly due to a decline in vegetable prices, giving the central bank room to cut rates further in coming meetings. Annual retail inflation (INCPIY=ECI) , opens new tab in February eased to 3.61%, below economists' estimate of 3.98% and the lowest since July. Inflation for January was revised to 4.26% from 4.31%. Sign up here. The South Asian country's inflation has been within the Reserve Bank of India's (RBI) tolerance band of 2%-6% for four consecutive months. The slower rate of inflation has been mainly aided by the fall in vegetable prices due to improved supplies on the back of favourable weather. Food inflation eased to 3.75% in February, the lowest since May 2023, from a revised 5.97% in the previous month. Vegetable prices fell 1.07% year-on-year, compared with an 11.35% increase in January. Prices of vegetables have been the main driver of inflation for over a year, with a rate of increase of more than 20% in nine out of the past 12 months. "Inflation decelerated at a faster pace than expected as food corrected sharply in February, on the back of a year-on-year decline in vegetables and pulses," said Radhika Rao, economist at DBS Bank. Prices of cereals rose 6.1% against a 6.24% increase in January, while those of pulses fell 0.35% compared to a 2.59% growth in the previous month. Core inflation, which excludes volatile items such as food and energy and is a better gauge of domestic demand, rose slightly to 3.9% to 4% in February from 3.7% in the previous month, according to two economists. Armed with this low inflation reading, the monetary policy committee is likely to be comfortable in easing rates in April, Rao said. Some economists expect an additional 50 basis point rate cut between April and August. In February, the Monetary Policy Committee cut its repo rate by 25 bps for the first time in nearly five years on expectations that inflation would ease and to boost sluggish economic growth. India's growth in the final quarter of 2024 improved over the previous period but remained relatively soft by its own standards. To top that, India also faces global headwinds due to uncertainties from U.S. President Donald Trump administration's plans to impose reciprocal tariffs. India's benchmark bond yield briefly fell to 6.6746% on Wednesday, down 2 bps from its previous close after February retail inflation eased. https://www.reuters.com/world/india/indias-february-retail-inflation-eases-361-yy-2025-03-12/

2025-03-12 11:39

March 12 (Reuters) - India's retail inflation fell below 4% in February for the first time in six months mainly due to a decline in vegetable prices, giving the central bank room to cut rates further in coming meetings. Annual retail inflation (INCPIY=ECI) , opens new tab in February eased to 3.61%, below economists' estimate of 3.98% and the lowest since July. Inflation for January was revised to 4.26% from 4.31%. GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI "February CPI came below ours and market expectations led by a sharp fall in food inflation. There is expectation that our estimate of 4.8% for FY25 will likely see a downside." "We continue to expect the RBI to cut repo rate by 25 bps in April policy even as it continues to ease the liquidity deficit in the system." RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE "Inflation decelerated at a faster pace than expected as food corrected sharply in February, on the back of a year-on-year decline in vegetables and pulses, while edible oils alongside cereals held ground." "The jump in core inflation to 4% reflected higher gold costs, while the contribution of other segments was little changed. Armed with this low inflation read, the MPC is likely to be comfortable to ease rates in April." JOE MAHER, ASSISTANT ECONOMIST, CAPITAL ECONOMICS, LONDON "The larger-than-expected fall in Indian headline consumer price inflation to below the RBI's 4% target in February supports our view that the central bank will continue to loosen monetary policy over the coming months." "In terms of policy implications, February's inflation data is further confirmation that the RBI can continue to focus on boosting economic growth. And with inflation looking set to stay close to the RBI's 4% target for the remainder of the year, we think the central bank will feel comfortable continuing to lower interest rates." "We forecast another 75bp of interest rate cuts this cycle, bringing the repo rate down to 5.50%, which is a slightly more dovish view than that of the consensus." GAURA SEN GUPTA, INDIA ECONOMIST, IDFC FIRST BANK, MUMBAI "Core inflation still remains benign indicating negative output gap. We see space for further monetary policy easing by RBI. We expect 25 basis points cut in April and 25 basis points cut in June." "We expect further liquidity infusion of 2 trillion rupees in FY26 to insure system liquidity is a mild positive. This is essential for transmission of rate cuts." ADITI GUPTA, ECONOMIST, BANK OF BARODA, MUMBAI "The significant easing in headline inflation can be attributed to lower food inflation, led by deflation in the vegetables category." "Core inflation edged up due to higher gold prices. The trajectory of food inflation will need close monitoring amidst evolving climatic risks. For now, the recent CPI reading gives credence to our expectations of a rate cut in April." ANITHA RANGAN, ECONOMIST, EQUIRUS, MUMBAI "After a long draught, CPI headline and CPI food seem to be converging with food inflation at 3.75% With this a disinflation in vegetables is the key driver." "Amidst the global cacophony of tariffs, especially the high food tariffs charged by India to protect its sensitive agriculture sector, domestic inflation being in bounds gives some breather that tariff shocks can be navigated to some extent." SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI "Hugely lower vegetable and food prices due to the influx of fresh winter produce helped headline inflation. Whereas core was higher owing to marginally higher gold prices, and some pick up in core services." DEVENDRA KUMAR PANT, CHIEF ECONOMIST, INDIA RATINGS AND RESEARCH, GURUGRAM "Reciprocal tariff by U.S. has potential to make a dent in Indian economic growth in FY26. February 2025 retail inflation would be a key factor for monetary policy committee meeting of April 2025." "We expect RBI to cut policy rates by 25bp and maintain sufficient liquidity in the system." MADHAVI ARORA, CHIEF ECONOMIST, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI "Despite the shocker on core, the pleasant headline CPI surprise implies that the Q4 FY25 inflation may undershoot RBI's forecast by more than 40bps, and could keep the rate cut possibility in April solid – as was also reflected in the recent dovish policy minutes." "However, we are keeping a tab on the fluid global dynamics and FX knock-on effect as well. So far, subdued global oil prices have tempered the knock-on effect from a weaker INR (Indian rupee). Besides, changing global narrative on growth and tariff noises may allow EM Central banks to be more tolerant to weaker FX, letting them ease their policy stance and rates." ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURUGRAM "We believe that the sequential uptick in vegetables inflation in March 2025 is likely to prevent a further softening in the food and beverages inflation print in the month, after the substantial cooling seen over the past four months. This would push up the CPI inflation print mildly to about 3.9-4.0% in the next month." "The Feb 2025 CPI inflation print falling well below 4% has cemented the expectation of a back-to-back 25 bps rate cut in the April 2025 MPC meeting. This may be followed by another 25 bps repo rate cut either in the June 2025 or the August 2025 meetings, dependant in large part on the next GDP growth print for Q4 FY2025." SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI "With inflation trending lower than anticipated, the average CPI for the quarter is now expected to fall below the RBI’s initial projection of 4.4%. Easing food prices, coupled with lower global crude oil prices, have provided a supportive backdrop for inflation to align more closely with the RBI's 4% target." "Against this backdrop, the RBI, which recently cut the repo rate by 25 basis points and implemented liquidity measures to address the system's deficit, is likely to maintain its easing cycle. The central bank's stance is influenced by growing concerns over the economic growth outlook, given rising global trade uncertainties and the increasing prevalence of protectionist policies." Sign up here. https://www.reuters.com/world/india/view-indias-february-retail-inflation-eases-361-yy-2025-03-12/

2025-03-12 11:35

March 12 (Reuters) - Sterling steadied against the dollar on Wednesday, holding below four-month highs hit in the previous session, as Britain held back from retaliating against U.S. tariffs on steel and aluminium imports, avoiding tit-for-tat moves. The pound was little changed at $1.2943 after hitting $1.29655 on Tuesday, its highest since November 8. Britain's government said on Wednesday it was disappointed with President Donald Trump's decision to impose tariffs on steel and aluminium imports but did not follow the European Union in retaliating. Britain was hoping to secure an exemption and dodge the U.S. tariffs on its steel sector, which is small but produces specialist products for defence and other sectors. Trump said last month the two countries might reach a bilateral trade deal that would avert duties. Sterling has gained more than 6% against the dollar since Trump took office in January, helped by Britain's largely balanced trade position with the U.S. Against the euro, however, the pound has had a poor run as the European currency has been buoyed by Germany's fiscal reset plan, which has lifted bund yields. The euro was little changed at 84.325 pence at 1100 GMT. The pound is following the dollar and the euro, said Kenneth Broux, head of corporate research FX and rates at Societe Generale. "It's not driving the bus, it's a passenger on the bus," Broux said. The euro has gained more than 2% on the pound this month, and is set for its best monthly gain since December 2022. The euro is also on course to snap five-straight quarterly losses, with a 1.9% climb so far this quarter. Sign up here. https://www.reuters.com/markets/currencies/sterling-little-changed-against-dollar-despite-us-tariff-woes-2025-03-12/

2025-03-12 11:29

Ship crashed into U.S. tanker on Monday Russian captain, 59, remains in custody Checks on Solong last year found safety deficiencies Fears over environmental impact ease LONDON, March 12 (Reuters) - Fears of an environmental disaster eased on Wednesday, two days after a container ship ploughed into a stationary U.S. fuel tanker off northeast England, as the vessel's owner said the detained captain was a Russian national. The Portuguese-flagged Solong had crashed with no obvious explanation into the larger Stena Immaculate, a tanker carrying jet fuel for the U.S. military. Sign up here. Huge fires and explosions charred the Solong and left the Immaculate with a gaping hole, but owner Stena Bulk said most of its jet fuel cargo remained intact. Stena Bulk Chief Executive Erik Hanell said only two of 18 fuel tanks had leaked, or about 10% of the cargo. "We will have a much clearer picture in the next 24-48 hours on the whole salvage operation," he told Reuters. Fuel leaked into the sea on Monday, raising fears for protected bird colonies, but the British coastguard said there had been no further reports of pollution from either vessel since then. Fires on the Solong, which was being held in position by a tug, were greatly reduced on Wednesday, while no flames were visible on the Stena Immaculate, the coastguard said. British police have arrested Solong's 59-year-old captain on suspicion of gross negligence manslaughter. Ernst Russ, the German company that owns the Solong, confirmed that he was a Russian national. The other 13 crew, one of whom is missing and presumed dead, are Russians and Filipinos. The West's ties with Russia are under heavy strain over the war in Ukraine, and worries about sabotage of power cables, telecom links and gas pipelines have grown since a string of outages in the Baltic following Russia's invasion of Ukraine in 2022. Russia's embassy in London did not immediately reply to a request for comment. Russians account for an estimated 11% of the global seafarer workforce, according to shipping officials. The Stena Immaculate was at anchor when it was struck, making the collision particularly surprising, given the safety systems that modern vessels carry. But a spokesperson for British Prime Minister Keir Starmer has said there is no suggestion of "foul play". The Stena Immaculate's 23 crew - all U.S. nationals according to Stena Bulk - were evacuated safely. Maritime safety records suggest minor issues were found when the Solong underwent routine inspections last year, but none justified detaining it. Ernst Russ said all the deficiencies had been "promptly rectified". Britain's Marine Accident Investigation Branch will gather initial evidence, but overall responsibility for the investigation lies in the U.S. and Portugal, the ships' flag states. https://www.reuters.com/world/europe/captain-arrested-uk-ship-crash-is-russian-national-owner-says-2025-03-12/

2025-03-12 11:17

DUBAI, March 12 (Reuters) - Egypt, which has struggled with declining domestic gas production, plans to lease a German floating gas liquefaction unit, the Egyptian petroleum ministry said in a statement on Tuesday. Egypt, the most populous Arab country, has been seeking to ramp up production at its giant Zohr offshore gas field, in a bid to cover rising domestic demand during the summer heat. Zohr's operator Eni (ENI.MI) , opens new tab has resumed drilling last month after output dropped in the largest gas field found in the Mediterranean to 1.9 billion cubic feet per day in early 2024, well below the peak reached in 2019. Egypt's Petroleum Minister Karim Badawi discussed the leasing plans of a unit currently in Germany's Baltic Sea terminal of Mukran with Philipp Steinberg, the German director-general for economic stabilization, energy Security, gas, and hydrogen infrastructure on the sidelines of CERAWeek energy conference held in Houston, Texas. The two also discussed Germany's possible purchase of Cypriot gas that flows through Egypt's liquefaction facilities for re-export to Europe, the ministry added. Egypt will send a delegation to Berlin this month to complete the contractual provisions. Egypt and Cyprus signed agreements last month to enable the export of gas from Cyprus's offshore fields via Egypt as both countries seek to bolster the Eastern Mediterranean's role as an energy hub. Sign up here. https://www.reuters.com/business/energy/egypt-lease-german-gas-liquefaction-unit-bolster-production-2025-03-12/

2025-03-12 11:12

NEW DELHI/MOSCOW, March 11 (Reuters) - India's Russian oil imports recovered in March, returning to near usual levels after a 3-month decline, as non-sanctioned vessels were delivering cargoes, while some supplies were diverted from Turkey, according to five trade sources and shipping data. The recovery of Russian oil flow to the world's third-largest oil importer and consumer is easing a supply crunch and cooling prices for rival Middle East grades. Russian oil supplies to India and China fell sharply earlier this year following U.S. sanctions on January 10 that targeted producers, insurers, ships and middlemen to curtail Moscow's oil revenue. In March, India's imports of Russian oil, mainly Urals crude, are back at 1.54 million barrels per day (bpd), after falling to 1.1 million to 1.2 million bpd in the previous three months due to concerns about sanctions, data from analytics firm Kpler showed. Freight rates for tankers on a one-way trip from Russian western ports to India hit a 12-month high of $8 million, attracting more ships to provide service while also squeezing Russian oil sellers' revenues, the sources said. A decision by Turkey's largest oil refiner Tupras to halt Russian oil imports also freed up more supplies for Asian markets, they added. Turkey's Russian oil imports fell to 127,000 bpd so far in March from about 300,000 bpd before the January sanctions hit, Kpler data showed. Discounts for Russian oil have narrowed to between $2.60 to $2.80 per barrel to dated Brent for cargoes loading in March for April delivery to Indian ports compared with about $2.50-$3 per barrel in the previous month, the sources said. Some traders have told Indian refiners they would use western ships to deliver cargoes to avoid risking sanctions, the sources said. Another source said that in recent weeks the price of Urals oil has fallen below $60 per barrel price cap set by the Group of Seven nations, allowing access to western shipping services. India, the No. 2 importer of crude from Russia, has said it would buy Russian oil only if it is supplied by companies and ships that have not been sanctioned by the United States. India became the biggest buyer of Russian seaborne oil sold at a discount after Western nations imposed sanctions on Moscow following its 2022 invasion of Ukraine in 2022. India follows United Nations sanctions, rather than those of individual countries, but fears of secondary sanctions by the United States create operational challenges as Indian banks and companies have significant exposure to the U.S. financial system. Sign up here. https://www.reuters.com/markets/commodities/russian-oil-supplies-india-recover-march-sources-say-2025-03-12/