World
India
With inflation hitting a multi-year low and expectations remaining subdued, SBI Research has projected that the Reserve Bank of India (RBI) may implement rate cuts of 50 basis points each in June and August. The report, released after the RBI’s latest monetary policy decision, highlights the possibility of cumulative rate cuts exceeding 100 basis points due to a weakening economic environment. The researchers also forecast GDP growth for the financial year 2026 (FY26) at 6.3 percent, with a downward bias. The projections follow recent data showing continued moderation in inflation, driven by falling food prices and core inflation stability.
RBI Already Cut Rates Twice in Recent Months
The RBI’s Monetary Policy Committee (MPC) announced a 25-basis-point cut in the repo rate on April 9, reducing it from 6.25 percent to 6 percent. This marked the second consecutive rate cut following a reduction from 6.5 percent to 6.25 percent on February 7. The policy interest rate adjustments aim to support economic growth by enhancing affordability and improving loan eligibility. The RBI maintained its inflation projection at 4 percent, citing significant improvements in the food outlook.
CPI Inflation Reaches 67-Month Low in March
Inflation data released on April 15 confirmed a sharp decline in March, with the Consumer Price Index (CPI) inflation falling to 3.34 percent. This level marks a 67-month low, primarily due to a 106-basis-point drop in food inflation. Food and beverage inflation eased to 2.88 percent in March, down 95 basis points from the previous month, led by deflation in vegetable prices. The report by SBI Research estimates average CPI inflation for FY26 at 3.9 percent.
Core, Rural, and Urban Inflation Show Stability
The CPI core inflation stood at 4.0 percent in March, slightly down from 4.1 percent in February. Rural CPI inflation for March dropped to 3.25 percent from 3.29 percent in February, while urban CPI inflation rose to 3.43 percent from 3.32 percent in the same period. The report highlights that falling inflation and weak growth expectations may prompt further easing by the central bank.
(With Inputs From ANI)
Also Read: Stock Market Today: Markets Open in Red As Sensex Falls 121 Points – Here’s What To Expect Ahead
