...should make RBI's task easy

The central bank may get a breather in its firefight against inflation, as the latest review by the Prime Minister's economic advisory council projects inflation to drop to 7% by March 2011, riding a declining trend in food prices. HT reports.

The central bank may get a breather in its firefight against inflation, as the latest review by the Prime Minister's economic advisory council projects inflation to drop to 7% by March 2011, riding a declining trend in food prices.

HT Image

Experts feel that if inflation stabilises below 7%, RBI will have a relatively easy task, though some rate hikes are still likely.

"I am reasonable optimistic that inflation will stabilise below 7% and in that case RBI's job will be almost done with 2-3 more hikes of 25 basis points each," said Ramit Bhasin, MD and head of markets at RBS.

The PMEAC has said manufactured food inflation has to be kept below 5%.