'Rate cut not likely in current fiscal with upside risks for inflation'

With the prevailing upside risk for inflation and given the Reserve Bank of India's stand, a rate cut is not expected in the current fiscal, according to Care Ratings' Chief Economist Madan Sabnavis.

On inflationary trend in the coming months, he said: "There are more upside risks than down side risks...we are looking at (inflation) number at 4.5 per cent by March...it is going to be upward trajectory, very much in line with the RBI has spoken of."

"..the RBI taking its stand that the inflation is going to be elevated for the rest of the months (of the current financial year). It does give an indication that there will not be any rate cut at least during the (current) financial year. But everything is going to be driven by data. If the CPI inflation number continues at the range of 4.5-5 per cent...we could actually defer the particular hope that the interest rates would be lowered," Sabnavis told BTVi in an interview on Monday.

Macro-data points like the Index of Industrial Production and Consumer Price Index will be released by the Central Statistics Office on Tuesday, followed by the Commerce Ministry's release of Wholesale Price Index.

"In terms of CPI inflation, we are looking at four per cent mark...and for WPI, it will be slightly lower at 3.8 per cent. And in terms of index of industrial production, we are looking at a number of 4 per cent..." he added.

--IANS

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