 "UBS says inflation is not structural issue, pegs CPI at 6% by Jan 2016")
The consumer price index will moderate to 6 percent by January 2016, in line with the Reserve Bank’s (RBI) inflation target, UBS said.
UBS said inflation in India is not “a structural issue”, adding that it is a demand-supply issue that can be addressed with monetary policy.
Inflation targeting by the RBI is already enjoying “some success” in bringing inflation under control, UBS said.
It expects the central bank to keep rates on hold till late FY2015.
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UBS expects the 10-year government bond yield at 6.5 percent by end FY16 vs the previous forecast of 7 percent.
Reuters
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