RBI may leave repo rate unchanged: ICRA

ICRA has come out with its report on weekly food inflation. According to the research firm RBI may leave the repo rate unchanged in the upcoming policy review.

The decline in food inflation for the week ended 1st October 2011 was led by the base effect, as the food articles index rose in week-on-week terms. Broadly, food inflation is likely to remain between 9% and 10% in October 2011. In particular, prices of pulses are expected to continue to rise, reflecting the lower area sown under pulses in 2011 as compared to the previous year, whereas prices of cereals and vegetables may decline to an extent subsequent to the harvest.

With IIP growth remaining sluggish for the second consecutive month and inflation expected to have moderated slightly in September 2011, we anticipate that the RBI may leave the repo rate unchanged in the upcoming policy review.

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