The inflation rate is expected to stay in the moderate range during the next few months. Considering the fact, the Citigroup expects that during the year 2012, the Reserve Bank of India may reduce policy rates by upto 100 basis points. In the report, "India Macro Flash", Citi Investment Research and Analysis said, "Given the strong base effect, we expect headline inflation to continue to print lower in the 6.5-7.6 per cent range in the next few months against the 9 per cent plus levels seen over the last two years."
It also said, "Lower core inflation print, coupled with deceleration in growth supports our view of the RBI easing the repo rate by a minimum 100 basis points in 2012." "Given that the RBI has said that the quantum and timing of rate cuts would be dependent on fiscal consolidation, we expect the repo rate to be cut post the Budget (due on March 16), that is, RBI's April 17 annual policy review," the report said. |
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