New Delhi [India]: The Reserve Bank of India (RBI) is expected to shift its focus from inflation control to supporting economic growth in its next monetary policy review meeting from April 7-9, according to Care Edge Ratings.
Key Takeaways from Care Edge Report:
✅ Expected Repo Rate Cut:
The RBI may lower the repo rate by 25 basis points (bps), bringing it down from 6.25% to 6.00%, following its first rate cut in 5 years in February 2025.
✅ Inflation Under Control:
- Retail inflation fell to 3.6% in February, its lowest level in seven months.
- Food and beverage inflation dropped to 3.8%, down from 9.7% in October 2024.
- Vegetable prices remain stable, further supporting lower inflation.
✅ RBI’s Growth Focus Amid Global Risks:
India’s GDP growth rebounded to 6.2% in Q3 FY25, but global headwinds pose challenges, including:
- US-India tariff tensions as President Donald Trump plans to announce reciprocal tariffs on April 2.
- Slow global economic growth and geopolitical tensions.
✅ Global Rate Cuts Could Influence RBI:
If the US Federal Reserve cuts interest rates, it could ease pressure on the Indian Rupee, providing RBI more room for additional rate cuts.
Market Outlook: Volatility Ahead
Care Edge expects Indian and global markets to remain volatile, given the uncertainty around trade policies. All eyes are on President Trump’s April 2 tariff announcement, which could impact India’s exports and financial markets.