January CPI’s m/m increase of 1.25% came as a bit of a surprise given that the m/m CPI increase for HCMC was 0.44% and Hanoi was 0.95%. Food prices and health services led the increase in prices this month. CPI is now 7.07% y/y up from 6.8% y/y in December 2012. In light of these numbers, we think the SBV will be more cautious about further easing and put a rumoured rate cut temporarily on hold at least until after Tet.