India won’t have to worry about inflation anytime soon: Jaish Mehta


“If you take a closer look at their words, people expected this to be a temporary suspension and a possible rate hike depending on data and such, but especially after fighting for such a long time to control inflation. It’s been a very natural thing for us to do,” says Bank of America’s Jaish Mehta.

After looking at the WPI and CPI data, should we say that the peak of inflation and the worst of inflation are over?
Sure, they were thinking along the lines of that too, seeing when the RBI was paused, but the actual numbers are definitely a very encouraging sign, so unlike other countries, I definitely don’t think we need to worry about inflation right now. for the time being. How will this affect expectations for the RBI interest rate, which has already reached a moratorium? Do you expect a rate cut in the near future?
That’s a big question. So if you take a closer look at their words, people expected this to be a temporary suspension and there might be a rate hike depending on the data etc. but especially for this long to cause inflation. It’s very natural when you’ve been fighting. Control, I think that’s part of it, because it’s simply right to not let it escape.

Looking at current inflation data, few would believe a rate hike is likely because of the language of the previous policy. I gave up on the situation of raising interest rates. As far as rate cuts go, at this point, of course, the easiest path is to follow the US path.

I don’t think we should really consider cutting rates at this point, but I don’t know. A rate cut seemed completely unlikely in the first quarter, but at this point I think the chances of a rate cut in the first quarter are probably 50%. 2024 calendar. So the final quarter of the fiscal year could hopefully see a rate cut if things settle down better.

IIP data shows a slight slump. His IIP data wasn’t as strong in March, but what about growth expectations that need to be factored into FY24?
We’ll still continue and I’m a little more optimistic than the economists so I’m going to stick with the RBI growth forecast but the IIP numbers are down and the overall market second half growth forecast is even lower It looks like it will. The reason there is a 50% chance of a rate cut is something I didn’t really expect.

So if the U.S. cuts rates, it doesn’t have to actually cut rates, but the focus could really shift to growth and the balanced growth and inflation focus could lead to a rate cut in the first quarter of next year. I have. Of course, some market players are also eyeing the December quarter.

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