RBI Monetary Policy Preview - A Balanced Policy With Focus On Liquidity: CareEdge Analysis

CareEdge Research Report

• The upcoming monetary policy committee meeting of the Reserve Bank of India, slated for this week, marks the first meeting of this fiscal year.

• The meeting is set against a backdrop of stronger-than-expected economic performance despite pressures in specific segments of the economy.

• While there has been broad-based moderation in inflation, higher food inflation keeps headline numbers elevated. However, benign core inflation will comfort RBI.

• The RBI will thus be inclined to adopt a cautious approach, preferring to assess the evolving risks associated with food inflation before making any changes in its decisions.

• The policy rates will likely be kept on hold in the upcoming policy meeting, with no change in stance.

• Going ahead, we anticipate that the MPC will contemplate rate cuts in the second half of FY25 as headline inflation approaches the 4% threshold.

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