RBI unlikely to cut rates soon, despite expected inflation drop: Ind-Rating

In a cautious outlook for the upcoming fiscal year, India Ratings and Research (Ind-Ra) projects a decline in inflation for FY25, yet it emphasizes that immediate rate cuts from the Reserve Bank of India (RBI) are unlikely.

- TBG NETWORK

According to Ind-Ra, the persistent pressure of elevated food prices continues to drive inflation, suggesting that any potential reduction in interest rates will hinge on evidence of stable inflation trends nearing the RBI's target of 4 percent. As such, market participants may need to brace for a prolonged period without rate cuts in the near future. While inflation and weak industrial activity weigh on the economy, there are positive signs in rural demand, driven by improved real wages for rural labourers in July and August 2024, and above-normal rainfall in most of the country. These factors are expec