ALSO READRBI may cut rate in Aug despite high June inflation: BofA-ML October rate cut 'alive' if August CPI is at 5%: Citigroup HSBC sees inflation below RBI's 2017 target, room for rate cut Inflation cools to 13-mth low; creates room for more rate cut Factory output shrinks, inflation cools, revive rate cut hopes
As a slowing inflation supported interest rate cuts, BJP MP Subramanian Swamy today took a dig at former RBI Governor Raghuram Rajan and his cheer choir.
"Why has since Rexit Consumer Price Index declined and interest rates too? R3 and his cheer choir a hoaz, or pushing an anti Indian agenda?," he tweeted.
While Rexit refers to exit of Rajan, he uses R3 to describe Raghuram Rajan. Swamy had virtually carried out a campaign against Rajan calling his inflation-centric policies anti-growth.
Consumer prices inflation slowed to 4.31 per cent in September from 5.05 per cent in August.
The all-powerful Monetary Policy Committee headed by Urjit Patel, Rajan's successor at RBI, last week cut benchmark interest rates by 0.25 per cent to 6.25 per cent.
While he had signaled more tolerance for price pressure, the easing in CPI inflation rate was in line with the RBI's forecast for average 5 per cent inflation in fourth quarter of 2016. This, many expect, would create more room for interest rate reduction.
The next monetary policy review is scheduled for December 7.