Crude below 80$, inflation coming at a yearly low of 5.88% and is back within RBI’s inflation range of 2-6% and adding to that, with the real interest rates back in positive for us (real interest rate is basically the difference between what investor gets via interest/repo rate minus inflation)
But, there are concerns about growth as IIP numbers were very weak and underwhelming.
I think RBI should now focus on growth more than inflation.
will we see rate cuts in the coming yr?
most likely there wont be any increase or decrease for some time. But even RBI is dependant on US FED to an extent for obvious reasons.
PS – I really believe that our inflation basket is outdated and should be revised to reflect the reality. It was last created in 2012 – A decade earlier
The better than expected CPI was driven entirely by the fall in vegetable prices.
This is a tricky situation because inflation isn’t really abating, yet growth is slowing down. You can’t cut rates, nor do you want to hike rates – which tells me that the RBI may hike by another 25bps hike in February and then go for a long pause.