India rate cuts still likely before 2012 ends

The Reserve Bank of India will wait for the government to curtail fiscal deficit before it unleashes up to 50bps in rate cuts in Q412, says BBVA.

The cautious stance is predicted as India’s June wholesale price inflation dipped in June to 7.35%, below the expected 7.6%, due to lower demand.

Here's more from BBVA:

India’s wholesale price inflation softened in June to 7.25% y/y from 7.55% in May as a let up in fuel and non food articles offset elevated food inflation (see today's India Flash for details).

The outturn was below expectations (consensus: 7.6% y/y) and, reassuringly, easing demand pressures kept core inflation contained at 4.9% y/y.

Looking ahead, inflation risks remain as high food prices, upside pressures from a sub-par monsoon, and imminent hikes in regulated fuel prices offset easing demand pressures.

We thus expect the RBI to keep rates unchanged at its meeting on July 31st, all the more so as the monetary authorities await further actions by the government to rein in the fiscal deficit. We continue to expect further rate cuts of 50 bps in 2012, pushed towards 4Q12.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia