Rajan's Final RBI Policy review to hold line against Inflation

Inflation at a two-year high will probably prevent Raghuram Rajan from cutting interest rates at his final policy review as head of the Reserve Bank of India on Tuesday. The government has still to pick a successor to the highly respected former International Monetary Fund chief economist.Get live Indian Stock Market News Updates visit us : http://www.ripplesadvisory.com/aboutus.php or Get Two Days Free Trial just on One Missed Call @98-27-80-80-90 

But when he walks away on Sept. 4 to return to academia and family living in the United States, Rajan will be relieved that he leaves behind a government that last week formerly adopted the consumer price inflation targets he had set. 

 

Chances are that the next RBI governor will be able to make what could well be the final reduction in an easing cycle that has brought the policy repo rate down to a more than five-year low of 6.5 percent. Rajan has lowered rates by 150 basis points since January last year, but economists doubt whether the current cycle has much further to run.