US inflation impact: Global recession fears to cool WPI inflation in India

Impact on CPI inflation to come later, rupee depreciation to negate some of this impact

Wholesale price inflation in India likely to dampen as 40-year high retail price inflation in the US may stoke fears of global recession via expected further monetary tightening by the Federal Reserve. The impact of global factors on retail price inflation will come with a lag effect.

However, the rupee depreciation will negate part of this effect due to expected capital outflow to safer places following recession fears and likely rate hikes by Fed, leading to higher returns for capital there. The rupee was trading at 79.80 against the US dollar in the morning trade on Thursday, compared to its