RBI unlikely to cut interest rates despite dip in December retail inflation: Report

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RBI unlikely to cut interest rates despite dip in December retail inflation: Report

The Reserve Financial institution of India (RBI) is unlikely to additional ease the interest rates in the following assembly of its Financial Coverage Committee although retail inflation declined in December 2020, a report by Motilal Oswal Institutional Equities mentioned.

The ‘Ecoscope’ report famous that the central financial institution is probably going to proceed with its calibrated method in the direction of the administration of home liquidity.

“It’s for the primary time for the reason that COVID-19 pandemic started that the CPI inflation has come throughout the RBI’s goal inflation vary of 2-6%. What stays to be seen is that if the downward trajectory in meals costs continues throughout CY21. In any case, we don’t anticipate any additional financial easing and the RBI is probably going to proceed to handle home liquidity in a calibrated method,” it mentioned.

The Client Value Index-based retail inflation for December got here in at a 14-month low of 4.59 per cent, down from 6.93 per cent in November, due to decrease meals inflation, confirmed official knowledge launched on Tuesday.

The Motilal Oswal report famous that the retail inflation knowledge for final month was precisely in line with its expectation, however decrease than market consensus of 5 per cent.

The Client Meals Value Index (CFPI) for final month got here 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 earlier month. The city CPI was 5.19 per cent in December 2020, in contrast with 5.19 per cent in November final.

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