Will keep a watch on disinflation process before moving rates-RBI

An expected good budget to support

The Reverse Bank Governor said that it will watch the disinflation process for some more time before moving the rates. We believe the rate is appropriately set right now given our anticipation of events over the next few months, said the governor in the post policy conference call.

The RBI said the core CPI is the key with service inflation some reduction over time. So we will give this disinflationary process some more time. We are not overly moved by the sort of fall in vegetable price inflation, but we are watching the disinflation that is happening in a number of important services, and let us wait to see how that moves.

He further stated that a good budget will help in the path of disinflation. A budget that is a strong budget and that could put us firmly on the fiscal consolidation path while shifting more of the focus towards investment rather than government consumption.

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