According to the financial services major, given the trend in core consumer price inflation (excluding food and fuel), policy rates are likely to remain higher for longer.
In the third quarter review of monetary policy, Reserve Bank Governor Raghuram Rajan raised the key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation.
RBI factors in both, consumer price index as wholesale price index based inflation data in its monetary policy. The next, monthly WPI data is scheduled for release on Friday.
Recently, a RBI appointed committee has suggested the central bank should focus on CPI based inflation and aim to bring it down to 8 per cent by January next year, and to 6 per cent by January 2016.
Shifting its stance of monetary policy towards targeting retail inflation, the RBI in its monetary policy said inflation an "inequitable tax" and may exceed 8 per cent by March end.
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