Standard Chartered halves India rate cut forecast

Standard Chartered said it expects the Reserve Bank of India to cut interest rates by 75 basis points in fiscal 2012/13, lower than its prior forecast of 150 basis points, citing higher crude oil prices and an excise duty hike.

Standard Chartered said it expects the Reserve Bank of India to cut interest rates by 75 basis points in fiscal 2012/13, lower than its prior forecast of 150 basis points, citing higher crude oil prices and an excise duty hike.

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"We expect WPI inflation to average 7.5% in the second half of 2012/13, much higher than 6.9% in the first half of the fiscal," it said in a note on Tuesday.

The wholesale price index is India's main gauge of inflation.

"This should cause the central bank to pause its easing cycle from September 2012 onwards as inflation moves above its comfort zone again," the note said.
The RBI's key repo rate stands at 8.50% at present.