With retail inflation showing signs of hardening, RBI Governor Raghuram Rajan may maintain status quo in the bi-monthly monetary policy review on Tuesday and wait for the impact of delayed monsoon rains before making the next
Analysts say RBI Governor Raghuram Rajan could soften monetary stance after Finance Minister Arun Jaitley stuck to a fiscal deficit target of 3.5 percent of GDP for next fiscal year in his third budget last month.
Retail inflation rate likely rose above the Reserve Bank of India's medium-term 5 percent target in November as food prices climbed, leaving little room for more interest rate cuts, a Reuters poll found.
India's retail inflation likely picked up in September, driven by higher food prices, but will remain comfortably below the central bank's target and allow room for further policy easing, a Reuters poll showed.
India Inc said the downtrend in both WPI and retail inflation numbers coupled with sluggish industrial output data make a strong case for the Reserve Bank to cut interest rate ahead of its September 29 review.