RBI has managed the growth-inflation conundrum quite remarkably Says Mr. Mohit Ralhan, TIW Capital
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Perspective on the CPI and IIP Data by Mr Mohit Ralhan, CEO, TIW Capital
The easing of CPI inflation to 11 months low of 5.88% is significant along with the fact that the inflation in food and beverages have now declined to 5.07%. It is now below the upper tolerance band of 6%. Although, RBI is likely to look at consistency of inflation remaining below 6%, it may be forced to take a harder look on the economy front given the contraction of 4% in IIP for the month of November. This is a critical time in the RBI policy frameworks and the data for the month of December will be very keenly watched. RBI may still want to go through one instance of policy rate hike and then take a breather if Inflation continues to remain below 6%. We still need to go through the next few months very cautiously but till now RBI has managed the growth-inflation conundrum quite remarkably.
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