The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.
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.
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.
Throughout January, fixed income investors observed marginal increases in yields alongside steeper curves across global developed markets, according to a Morgan Stanley study.
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.
The anticipated increase is attributed to several factors including higher growth prospects in emerging markets compared to developed markets and the potential for US Federal Reserve rate cuts later in the year.
Mesquita highlighted the expectation that the global economy would grow around three per cent in 2024, slightly below the century's average, creating some slack that might contribute to reducing inflation.
The Federal Reserve on Wednesday held the interest rates steady at a 22-year high for the third straight meeting, while the central bankers have predicted three possible rate cuts next year, The Hill reported on Wednesday.
This surge was fuelled by the recent triumph of the ruling Bharatiya Janata Party (BJP) in state elections, coupled with robust domestic macroeconomic data and mounting expectations of a US rate cut in March.