India's top economics adviser says scope for rate cut
India's central bank has room to cut interest rates further with inflation expected to remain under control in coming months, the country's top economic adviser said on Tuesday. Arvind Subramanian said India's adequate food stocks would help contain inflation even if the upcoming monsoon rains, which are vital for crops throughout the country, are weak.
"The inflation forecast is lower than the RBI target so it has implications for interest rates," Subramanian said at a press conference to mark Prime Minister Narendra Modi government's first year in power.
"It is possible to contain (inflation) going forward even if the monsoon is not going to be as good," he said, adding that there were signs the economy "is picking up".
The Reserve Bank of India (RBI) is tipped to cut rates at its next meeting on June 2, with retail inflation cooling to a four-month low in April of 4.87 percent.
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