Market expects MPC to implement cumulative 50 bps rate cut by March 2025

They also foresee a continued decline in food prices, which fell to 5.1 per cent in July from 8.4 per cent in June year-on-year, further supporting expectations of a rate cut

With improved liquidity in banking, driven by increased government spending, market participants expect the Reserve Bank of India’s (RBI’s) Monetary Policy Committee to cut rates cumulatively by 50 basis points by March.

They also foresee a continued decline in food prices, which fell to 5.1 per cent in July from 8.4 per cent in June year-on-year, further fuelling expectations of a rate cut.

“We expect a 50-basis point cut by March. So, the rate-cut cycle starts either in October or December, with December appearing more likely because for now the RBI will need a few more months