Retail Inflation flares off the charts

11.52% Urban Inflation and 9.57% Rural inflation played to RBI’s playbook suggesting it should hold fire on its remaining rate cut ammunition of less than a 100 bp for 2013 FY. That means still CRR is a lo 4.75% SLR untouched at 24% and Repo rate at 8% in a corridor of 8.5% MSF and 7.5% Reverse Repo rate

Meanwhile it did not help that USD was at the same time weakest against the EURO as well as the AUD, Rupee choosing to snort at RBI policy to a 50 p rise to 56 levels in June futuresUSD also strengthening after a post weekend opening lows against the two currency. Common sense dictates that the rupee should start back against the Dollar and ECRF flows may or may not be substantial so one wonders if we will create another gap with global currencies in the quest for a news flow saying rate cut positive, IIP negative because no rate cut?



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