India’s annual retail inflation eased to 6.71% in July, buoyed by food prices, but remained above the central bank’s tolerance band of 2%-6% for the seventh consecutive month, government data released on Friday showed.
Analysts in a Reuters poll had predicted annual inflation of 6.78% in July, compared to 7.01% in the previous month.
Upasana Bhardwaj, Chief Economist, Kotak Mahindra Bank, Mumbai
“CPI headline inflation for July has moderated in line with our expectations mainly led by food inflation, while core inflation remains high and sticky.”
“With some readings expected to be above 7% in the coming few days, inflation is likely to hover above RBI’s upper limit of 6% by January 2023. We expect the repo rate to remain at 6% till the end of 2022, followed by a There will be stagnation and a change. To a neutral policy stance.”
Garima Kapoor, Economist, Institutional Equities, Elara Capital, Mumbai
“July CPI inflation eased amid the impact of moderation in food prices and lower oil prices. While CPI inflation will remain above the RBI’s tolerance band during this calendar year, decline in global commodity prices, peak from DXY and FII inflows A change in the Indian equity market will give the MPC more policy leeway to move less aggressively from here.”
“We expect the MPC to hike the policy repo rate by 25 to 35 bps before pausing to assess the impact of the 140 bps hike.”
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