Policy rate unlikely to change till fiscal-end, says a Report

Policy rate unlikely to change till fiscal-end, says a Report

FPJ BureauUpdated: Saturday, June 01, 2019, 08:30 AM IST
article-image

Says, the battle against inflation will continue till supply-side issues are adequately addressed

New Delhi : The Reserve Bank of India (RBI) is likely to keep its policy rates unchanged till the end of this fiscal year and a probable rate action is likely only in the next fiscal, said report.

According to Dun & Bradstreet, the moderation in inflation is largely owing to base-effect and supply-side pressures to inflation still remain.

“The battle against inflation will continue till supply-side issues are adequately addressed. RBI would thus keep its policy rate unchanged till the end of this fiscal year with a probable action visible only in early next financial year,” Dun & Bradstreet India Senior Economist Arun Singh said.

CPI inflation moderated to 7.8 per cent year-on-year in August (as against 8.0 per cent year-on-year in July). The wholesale inflation also fell to a nearly five year low of 3.74 per cent in August.

“On the WPI inflation front, there is a significant base effect at play, resulting in moderation of food prices and it will continue to do so in the forthcoming months as well,” Singh noted. D&B expects the CPI (combined) inflation to remain range-bound at 7.6 per cent-7.8 per cent during September 2014. On growth, the report said that “tentative” signs of strength are emerging in the country, but a full-fledged cyclical recovery is still some distance away, the report said.

The country’s GDP expanded at the fastest pace in the first quarter of FY 2015 since Jan-April period of FY 2012, driven by a sharp recovery in industrial growth and gradual improvement in services sector.

“The government has announced several measures to improve the ease of doing business and there has been some progress in clearing and reviving stalled projects.

 That said, a full-fledged cyclical recovery is still some distance away and the current macro-scenario should be construed with some caution,” Singh said.

RECENT STORIES

Game-Changing Alliance: Ambani's Reliance Ventures Into Adani's Power For The First Time; Acquires...

Game-Changing Alliance: Ambani's Reliance Ventures Into Adani's Power For The First Time; Acquires...

SRM Contractors IPO Subscribed 86.57 Times On Last Day Of Bidding

SRM Contractors IPO Subscribed 86.57 Times On Last Day Of Bidding

Tax-Saving Tip From Zerodha CEO Nithin Kamath: 'If You're Married And Hindu..."; Here's How To Save...

Tax-Saving Tip From Zerodha CEO Nithin Kamath: 'If You're Married And Hindu...

Holy Cities Like Ayodhya, Varanasi Attracting Big Retail Brands: Report

Holy Cities Like Ayodhya, Varanasi Attracting Big Retail Brands: Report

A Big Relief For Byju's: NCLT Rejects Investor Plea To Stay Byju's Rights Issue EGM On March 29 Amid...

A Big Relief For Byju's: NCLT Rejects Investor Plea To Stay Byju's Rights Issue EGM On March 29 Amid...