RBI rate cut possible if inflation is over 6% for 2 qtrs: Icra
image for illustrative purpose
Mumbai: Domestic ratings agency Icra on Monday said it expects a rate cut by the Reserve Bank to happen only in the July-September quarter next year. The overall cuts in the cycle will be a shallow 0.50-0.75 per cent, the agency said.
A rate hike by RBI is possible only if the headline inflation is at over six per cent for two consecutive quarters, the agency said. “The MPC’s (Monetary Policy Committee) latest forecasts suggest inflation will remain above 5 per cent through Q1 FY2025, based on which we have pushed out our forecast for the earliest cut to Q2 FY2025,” the agency said.
The official data released on Monday said consumer price inflation (CPI) spiked to a 15-month high of 7.4 per cent for July. “The data for food prices for early August 2023 is not very promising, and we expect the headline CPI inflation to print above the 6.5 per cent mark in August, before cooling off materially in September,” its chief economist Aditi Nayar said.
