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Economists see Shaktikanta Das as dovish, expect RBI to cut interest rate

Economists expect the RBI to reverse its stance and lower rates thereafter

RBI, RESERVE BANK OF INDIA, CENTRAL BANK

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Going by the events leading to the October board meeting and the proceedings of the last three meetings, it’s obvious that the government will not let loose the pressure to change the way the Indian central bank operates

Subhadip Sircar | Bloomberg

Last Updated : Dec 13 2018 | 11:16 AM IST

Bonds bulls in India have more reasons to cheer this week. Receding inflation pressure and a new central bank governor widely seen to have a dovish bent mean the swap markets have started pricing in interest-rate cuts.

One-year onshore swap rates are factoring a 50 per cent chance of a reduction around April or June, or 100 per cent chance of a 25-basis-point cut in August, according to ICICI Securities Primary Dealership Ltd. That’s a turnaround from a view in October for a hike of 100 basis points over the next 12 months.

“With the softening of CPI trajectory in the near