The Reserve Bank of India (RBI) shocked markets earlier this month by cutting its main policy rates at an unscheduled meeting. The accompanying statement also paved the way for further policy loosening. Indeed, with the latest data showing that both economic activity and inflation remain subdued by past standards, another 25bp rate cut at the scheduled meeting on 3rd February seems likely. Further out, we still expect the repo and reverse repo rates to end the year at 7.00% and 6.00% respectively, 75bp lower than where they are today. By contrast, the consensus is for the repo rate to end the year at 7.50%.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services