Mumbai: India’s inflation could stand at 6-7% with an upward risk at end-March 2010, Edelweiss Securities projected in a note, compared with the central bank’s projection of 5%.
At its quarterly policy review, the Reserve Bank of India (RBI) raised its inflation rate projection to 5% from 4%, while the growth rate estimate was maintained at 6% for fiscal year 2009-10, though with an upward bias.
Edelweiss Securities estimates the economy will grow at 6-6.5% in the current fiscal.
“The current policy announcement reiterates our view that the central bank has reached the end of the monetary easing cycle,” it said, adding it sees key policy rates unchanged for the rest of the calendar year.
Edelweiss said calendar 2010 may witness spells of large spikes in inflation, partly due to a low base, but “given RBI’s history of low tolerance for inflation, it will be critical how the balance between the counteracting objectives of growth and price stability is maintained at that time,” it added.