Inflation may stay below Reserve Bank's target of achieving 5 per cent in early 2017, opening up the space for lowering interest rates. A HSBC report added that the drop in inflation trend is expected to continue as the new crop comes into the market, while CPI inflation also could fall to below 4.5 per cent in the period January-March 2017.
“The Reserve Bank has two objectives, to reach its 5 per cent inflation target in early 2017 and keep real rates at the 1.5-2 per cent range. Marrying the two would open up space for easing by 50 bps,” a news agency said citing the global financial services major report.Inflation may stay below Reserve Bank's target of achieving 5 per cent in early 2017, opening up the space for lowering interest rates. A HSBC report added that the drop in inflation trend is expected to continue as the new crop comes into the market, while CPI inflation also could fall to below 4.5 per cent in the period January-March 2017.#
Although, HSBC expects a rate cut in the upcoming October 4 meeting, yet the financial services major expects the cut to be effected in December as against in October. (AR)
Fibre2Fashion News Desk – India
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