New Delhi, June 13 -- India's inflation trajectory is giving the Reserve Bank of India more room to hold rates through Q1FY27, but food and fuel risks could still flip the script in H2. Yes Securities expects headline CPI for Q1FY27 to undershoot RBI's 4.2 per cent forecast as the May print at 3.93 per cent YoY and benign base effects keep the average low. However, building momentum in vegetables, core services and pump prices, plus the looming El Nino threat, means RBI will likely stay "data-dependent" rather than front-load any August rate hike.

Headline CPI for May rose to 3.93 per cent YoY from 3.48 per cent in April, driven by a 0.75 per cent MoM gain -- the strongest since April. Transport led with petrol/diesel pump prices up 1.9 ...