Inflation continues its downfall : drops to 6.8%

Inflation in India has been cooling down ever since it peaked above 12% in Sept/Oct. One of the most important reasons behind falling inflation is falling global crude oil prices. India has recently reduced prices of petrol by Rs. 5/- per litre and diesel by Rs. 3/- per litre. This price reduction will continue push inflation downwards for the months to come. Moreover, the government has also hinted at a further price cut in petrol and diesel which could push inflation well below the RBI's target of around 5% in the coming months.

Chances of deflation have increased. The recent interest rate cut by US (now at 0.25% !) increase the chances of deflation in US.

If you are still holding onto your gold investments, NOW is the time to exit.

Dec 18, 2008

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