Expect rate cuts to happen in 2015: Jayesh Mehta, BoA Merrill Lynch

In a chat with ET Now, Jayesh Mehta, Country Treasurer, BoA Merrill Lynch, shares his views on the latest inflation numbers. Excerpts:

ET Now: First it was CPI, now WPI. Do you think the RBI has finally won the battle against inflation?

Jayesh Mehta: Yes, the RBI has won the battle against inflation. We are looking at rate cuts in the next six months, but whether it will be in the December policy or whether in February or April, that is somebody’s guess. But market definitely will continue the momentum till the rate cut actually happens. So from that perspective, the markets definitely are going to run ahead of the cuts. We do expect the rate cuts to happen in 2015.

Yes, it has come lower than the expectation of the market. Both CPI as well as WPI have come 20-30 bps lower than the market expectation. We look for a rate cut, but time-wise are not sure about it.