RBI's Monetary Policy Review - Poised For Stability: Dolat Capital

Dolat Capital Report

Reserve Bank of India’s Monetary Policy Committee has voted in majority ( six out of six) for a pause in rate hike – repo rate unchanged at 6.5% and five out of six members voted to remain focused on withdrawal of accommodation stance to ensure inflation progressively aligns to the target.

Headline inflation may get impacted in next couple of months, because of the volatility seen around food prices.

Nimble management of liquidity conditions would continue to align inflation to the targeted level of 4%.

Our view

Overall policy looks to be well balanced. While MPC remains on track to control inflation and bring it down to the target, but the policy statement reflects that going forward MPC would also be mindful of the risk of policy overtightening.

We expect a continued pause in February 2024 policy meet. As we move into FY25, we expect a possible 75-100 bps rate cut with the probable timing for the first cut to be around Q2.

Risks to rate cut expectation is rise in oil and food prices.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.