RBI may not cut rates despite drop in retail inflation: Motilal Oswal

wayne


The (RBI) is unlikely to further ease the interest rates in the next meeting of its Monetary Policy Committee even though retail declined in December 2020, a report by Motilal Oswal Institutional Equities said.


The ‘Ecoscope’ report noted that the central bank is likely to continue with its calibrated approach towards the management of domestic liquidity.



“It is for the first time since the COVID-19 pandemic began that the CPI has come within the RBI’s target range of 2-6%. What remains to be seen is if the downward trajectory in food prices continues during CY21. In any case, we do not expect any further monetary easing and the RBI is likely to continue to manage domestic liquidity in a calibrated manner,” it said.


The Consumer Price Index-based retail inflation for December came in at a 14-month low of 4.59 per cent, down from 6.93 per cent in November, due to lower food inflation, showed official data released on Tuesday.


The Motilal Oswal report noted that the retail inflation data for last month was exactly in line with its expectation, but lower than market consensus of 5 per cent.


The Consumer Food Price Index (CFPI) for last month came in at 3.41 per cent, down from 9.50 per cent in November 2020.


The provisional rural CPI in December 2020 was recorded at 4.07 per cent, down from 7.20 per cent in the previous month. The urban CPI was 5.19 per cent in December 2020, compared with 5.19 per cent in November last.


–IANS


rrb/sn/tsb

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Next Post

Trump Impeached For Unprecedented Second Time

Donald Trump became the first US president in history to be impeached twice when the House of Representatives voted Wednesday to charge him with inciting last week’s mob attack on Congress. The Senate will not hold a trial before January 20, when Democrat Joe Biden assumes the presidency, meaning the […]

Subscribe Now