CPI inflation is estimated to average around 4.3 percent in January-June 2025.
The Reserve Bank of India (RBI) may announce a cut in policy interest rates in its monetary review meeting in February 2025. German brokerage Deutsche Bank has full confidence in this. The brokerage says that the long wait for relief in interest rates may end with a cut of 0.25%. According to PTI news, Deutsche Bank analysts said delaying the rate cut will further hurt growth. He said that if there is a delay in action, there is a risk of RBI being left behind.
Repo rate will come down to 6 percent in H12025
According to the news, Deutsche Bank said that we expect RBI to cut the policy rate by 0.25 percent in the monetary (review) of February and April, which will bring the repo rate to 6 percent in H12025. It said monetary transmission in India operates with a considerable lag of at least three quarters. Therefore, it sees a justification for the RBI to start cutting rates from February. Urging not to delay the rate cut, the brokerage said that we believe that the sooner the rate cut is done, the more positive impact it will have.
Rates remain intact for the last 11 policy reviews.
Let us tell you here, that the RBI has kept rates unchanged for the last 11 policy reviews under former governor Shaktikanta Das, while growth has fallen to a multi-quarter low, and now all eyes are on his successor Sanjay Malhotra in February. The first rate under is subject to review. This is the longest pause before the RBI starts cutting rates in almost two years, the report said, indicating that the longest pause of 11 months between the end of a rate hike cycle and the beginning of a rate cut cycle has been recorded by the RBI. Have waited.
What is the estimate regarding inflation?
The brokerage’s note comes after India’s December CPI inflation declined to 5.22 percent from 5.48 percent in November. Analysts said they estimate CPI inflation to average around 4.3 percent in January-June 2025, which is lower than the RBI forecast. Headline inflation will remain lower than the 4.9 per cent estimated by the RBI for the January-March period, as vegetable prices fall sharply with the arrival of new crops in the winter months.
Latest Business News
