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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.
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.
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