CARE Ratings chief economist Madan Sabnavis says the RBI is unlikely to cut rates Monday after the inflation print for August comes in sharply above estimates. He says the data gives no reason for comfort on any of the three sub-components of inflation--primary articles, manufacturing and fuel prices. He adds that the sharp rise in the fuel price index was on account of a muted reading in the previous month due to a low-base effect. However, India's move Thursday to cut fuel subsidies is a big positive and there is an outside chance that the RBI will cut rates in acknowledgement of the government's efforts to narrow its fiscal deficit. The wholesale price index rose by 7.55% year-on-year in August vs 6.87% in July; analysts in a Dow Jones poll had tipped it at 7.0%. The government also revised the June WPI upwards to 7.58% from 7.25%.
Find us on Google+
No comments:
Post a Comment