food prices, inflation

The MPC's June 2025 decision to cut the repo rate by 50 basis points - more than expected - surprised markets

Inflation undershoots, yet risks remain: Rate cuts may spark volatility

Business Standard

Expect RBI to keep accommodative stance at least till first half of FY22

chart

Governor Shaktikanta Das has pledged to stay accommodative well into 2021 as he tries to dig the economy out of an unprecedented technical recession

RBI, Reserve Bank of India

We think the MPC could express its willingness to maintain the accommodative monetary stance at least till H1FY22, which should help sentiments

RBI Governor Shaktikanta Das

Further rate cuts are contingent on the non-banking financial company sector recovery prospect

Rate cuts to continue

As far as future rate cuts are concerned, we expect one more 25 basis points rate cut in this cycle

Monetary policy: RBI may go for another 25 bps cut in Aug, says expert

Kaushik Das

Encouraged by a lower CPI inflation trajectory, the Reserve Bank of India (RBI) has cut the repo rate by 50 basis points (bps) in the first quarter of FY15. While longer-tenure bond yields have reduced significantly, the transmission from a repo rate cut to lower bank lending rates has not materialised yet, due to the following factors.Asymmetry in monetary policy transmissionBanks find it more difficult to cut lending rates immediately after a cut in the policy rate because the cost of deposits does not adjust commensurately and immediately, given the fixed nature of deposit contracts. However, banks can raise lending rates far more quickly after a policy rate hike, because loans are mostly at variable rates, and can be re-priced faster. There is a competitive constraint of reducing deposit rates too much and too quick as well. If bank deposit rates are lower than small savings rates which are administratively fixed, there could be some deposit flight to small savings schemes providin

The curious case of monetary policy transmission in India

RBI could consider engineering an 'effective easing' in market rates, by reducing the liquidity deficit in the money market

Expert take: Central bank to stay on the sidelines

We expect the RBI to keep policy rates unchanged in the monetary policy review on April 1

Kaushik Das

Kaushik Das

Kaushik Das

Inflation undershoots, yet risks remain: Rate cuts may spark volatility

Expect RBI to keep accommodative stance at least till first half of FY22

Rate cuts to continue

Monetary policy: RBI may go for another 25 bps cut in Aug, says expert

The curious case of monetary policy transmission in India

Expert take: Central bank to stay on the sidelines

RBI to stay on a wait & watch mode