India May Start Loosening Policy by Mid-2012, CLSA’s Malik Says
India’s central bank may start loosening its monetary policies by the middle of next year as inflation eases, Rajeev Malik, economist at CLSA Ltd., said.
The benchmark inflation rate may drop to about 6 percent by June, helped by a possible correction in commodity prices, Malik told reporters on the sidelines of an investor conference organized by his firm in Hong Kong today. Higher interest rates and a slower global economy mean the Reserve Bank of India may cut its economic growth forecast at its next policy meeting, he said.
“We haven’t seen the impact of both the rate hikes and the global backdrop coming through,” Malik said. “We see a higher probability of the RBI easing before the middle of next year.”
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