ING Vysya’s Bhardwaj Says India’s RBI May Reduce Rates in April

Upasna Bhardwaj, an economist at ING Vysya Bank Ltd. (VYSB), comments on India’s inflation rate, borrowing costs. The wholesale-price index rose 7.47 percent in December from a year earlier after a 9.11 percent gain in November, the government said today. The median of 25 estimates in a Bloomberg News survey was for a 7.4 percent increase.

Bhardwaj spoke in a phone interview from Mumbai.

“The manufacturing sector data is showing a monthly increase which is not acceptable for any softening of interest rates. Core inflation is also showing an uptick and that is a cause of concern if we need easing of policy rates.

‘‘The demand side pressures are not easing which the central bank would be monitoring more closely.

‘‘The central bank’s emphasis is going to be on inflation for sustainable medium term growth. However, they are not finding signs of considerable easing in the inflation trajectory.

‘‘Therefore, I don’t see any rate cut in the Jan. 24 policy meeting. The earliest reduction we are expecting would be in April.

‘‘The central bank will have to continue with liquidity easing measures because the situation is going to be tight. They may step-up the bond purchases or reduce the cash reserve ratio.’’

To contact the reporter on this story: Anoop Agrawal in Mumbai at

To contact the editor responsible for this story: Hari Govind at

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