Economy
Inflation
Keep your eyes glued on ‘core’ inflation. We take note of the lower-than-expected
June headline inflation print of 7.25%, but continue to stay focused on the core
inflation which for the fourth month remained sticky at ~5%. The lower print has been
mostly due to lower ‘fuel and power’ and ‘non-food articles’ inflation. While the latest
inflation reading opens up a debate whether RBI will now be ready to ease monetary
policy, we are not as sure as the inflation mix remains problematic. With CPI inflation in
double digits too, we maintain our stand for a ’wait-and-watch‘ policy from RBI till the
fiscal policy starts to complement monetary policy or if growth slides significantly lower.
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link : http://www.kotaksecurities.com/pdf/indiadaily/indiadaily17072012mv.pdf
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