Going ahead into this week, investors will closely monitor the RBI monetary policy meeting starting Wednesday, with the outcome to be pronounced on Friday morning.
This outlook comes amidst a backdrop of sustained momentum in credit growth, particularly across agriculture, MSME, and services sectors, as revealed by the latest credit growth numbers.
Firm GDP growth forecasts, inflation at manageable levels, political stability at the central government level and signs that the central bank is done tightening its monetary policy have all contributed to painting a bright picture for the Indian economy.
The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.
S&P Global Ratings forecast rate cuts of up to 75 basis points (100 basis points is equal to 1 percentage point) in India by its central bank in the financial year 2024-25.
Indian stock indices traded firm Thursday after the opening bell, tracking a global stock rally after the US Federal Reserve, in its latest monetary policy review meeting, maintained its projection of three rate cuts this year.
Indian stock market indices extended their losses from the previous week, though marginally, tracking weak US market cues and concerns of over-heating in small and midcaps space.
Retail inflation in India eased a tad in February to 5.09 per cent from 5.10 per cent the prior month. It was at a four-month high of 5.69 per cent in December.
Reducing policy restraint too soon or too much could result in a reversal of progress was made in terms of inflation and ultimately require even tighter policy to get inflation back to 2 per cent target, US Federal Reserve Jerome Powell said, as he indicated the central bank is no rush to cu
Morgan Stanley expects the Reserve Bank of India to start cutting rates from June 2024, with both retail and wholesale inflation figures remaining at a manageable level.
US Fed had raised interest rates from near zero to now 5.25-5.50 per cent in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
Reserve Bank of India Governor Shaktikanta Das said on Thursday that all its actions, including certain restrictions it imposed on Paytm's associate bank, are in the best interest of the public.