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See inflation stabilising soon; RBI to stay on hold: Nomura

Sonal Varma of Nomura sees business cycle recovery starting to come back. She says relative to manufacturing, it is the services side of the economy that is doing much better.

Despite the CPI numbers coming in marginally worse than expected, Sonal Varma of Nomura expects inflation to stabilize over the next 3-6 months. But the path to inflation stabilization may be bumpy, she warns.

Core CPI, ex-fuel is closer to 5 percent versus the current 4 percent, she adds. Based on this and a few other factors, she believes the Reserve Bank is likely to stay on hold, going forward. According to her, the RBI has frontloaded rate cuts.

Varma sees business cycle recovery starting to come back. She says relative to manufacturing, it is the services side of the economy that is doing much better.

Stay tuned for more…

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