RBI Unlikely To Cut Rates Recently As Inflation High: Report

NEW DELHI: With inflation still high, the Reserve Bank at its fourth bimonthly policy review on Tuesday is unlikely to cut interest rates, Care Rating has said in a report.

"Given the economic parameters of improving growth of 5.7 per cent (Q1 FY15) GDP and elevated retail inflation on the back of potential threats to inflation going ahead, we do not foresee any room for a rate cut in the upcoming policy announcement," the ratings agency said ahead of the RBI's policy review scheduled Sep 30.

Consumer price index (CPI) based retail inflation eased to 7.8 per cent in August from 8.59 per cent in April. Wholesale price index (WPI) inflation has also eased to 3.74 per cent in August from 5.55 per cent at the start of the current fiscal.

The RBI headed by the monetarist-inclined governor Raghuram Rajan has set a target for CPI inflation at 8 per cent by January 15 and 6 per cent by January 2016.

The RBI left key interest rates unchanged in its third bi-monthly monetary policy review early August, saying near-term tightening is not expected if inflation continues to ease.

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