With India's economic growth sputtering, the Reserve Bank of India was expected to maintain a rate-cutting cycle, but an uptick in near-term inflation could give the central bank's Monetary Policy Committee reason to pause for now.
MUMBAI - With India’s economic growth sputtering, the Reserve Bank of India was expected to maintain a rate-cutting cycle, but an uptick in near-term inflation could give the central bank’s Monetary Policy Committee reason to pause for now.
Some economists and market insiders argue it may be prudent for the MPC, the policy committee, to hold its fire when it meets early next month. Market participants have factored in at least a 25 bps rate cut by the MPC on August 6 while analysts are predicting a total 50-75 bps cuts over the rest of the fiscal year that runs to March 31.
Rahul Bajoria, an economist at Barclays, said the spike in both consumer and wholesale prices “could lead to a tempering in enthusiasm for material front-loaded policy support from here on.”
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