Retail inflation falls further opening the gates for a rate cut: Angel Broking

Views of Mr. Vaibhav Agrawal (Head of Research and ARQ):

"Retail inflation (CPI) for the month of May 2017 came in at a 5-year low of 2.18%, sharply lower than the 2.99% reported in the previous month of April 2017. The big thrust down again came from food inflation, which showed negative growth at 1.05%. The weak CPI inflation reinforces the view that the actual inflation for this fiscal may end up much lower than the RBI's estimated trajectory. In fact, RBI expects inflation in range of 2.0-3.5% in 1HFY18 and 3.5-4.5 per cent in the 2HFY18. The May inflation number indicates that actual inflation may end up at the lower end of the range, at least for the first half. The slower GDP growth, normal monsoon and current inflation trajectory, all combined, we are hopeful to see interest rate cut in the August monetary policy."

Source : Equity Bulls

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