Why does Nomura expect no April rate cut in India?

Nomura anticipates no April rate cut in India because inflation is expected to rise and "stealth easing" has already effectively lowered policy rates.

What is Nomura's revised inflation forecast for India?

Nomura has raised its inflation projection for India's next fiscal year to 4.1% from 3.9% based on the old series.

Has India's central bank already eased policy rates?

Yes, Nomura suggests that 'stealth easing' has already occurred, bringing the weighted average call market rate near the 5% policy rate.

Home / Business and Economy / RBI Policy Easing 'Stealthy,' No April Rate Cut Expected

RBI Policy Easing 'Stealthy,' No April Rate Cut Expected

13 Feb

•

Summary

Nomura no longer predicts an April rate cut by India's central bank.
Revised inflation forecasts show a rise for the upcoming fiscal year.
Existing 'stealth easing' has already pushed rates near the target.

RBI Policy Easing 'Stealthy,' No April Rate Cut Expected

Nomura has adjusted its forecast, predicting that the Reserve Bank of India will not implement a rate cut in April. This change in expectation stems from anticipated inflation increases and existing "stealth easing" within monetary policy.

Previously, Nomura had assigned a significant probability to a rate cut. However, with the release of new consumer price inflation data and revised projections, the firm now believes a pause is more probable. The call market rate has been hovering near the monetary policy corridor's floor, further supporting the argument against immediate rate reductions.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.