RBI won’t pivot towards rate cuts this fiscal year: DBS’ Radhika Rao
The Reserve Bank of India’s (RBI) rate-setting panel, the Monetary Policy Committee (MPC), is unlikely to make a pivot on rate cuts in the current financial year as the focus remains on curbing inflation that has been above target for over three years now, according to Radhika Rao, Executive Director and Senior Economist, DBS Group Research.
The RBI’s inflation target is 4 percent with a tolerance band of two percentage points on either side. The current rate of inflation in the country is 6.44 percent.
Last week, the MPC surprised markets by leaving the repo rate unchanged at 6.5 percent while warning that its action should not be taken as a signal for forthcoming meetings as well. Despite this, markets and analysts have started eyeing a string of rate cuts, starting from as soon as October this year.