Tariff shock indicates 25bps rate cut, RBI stance may turn ‘accommodative’

THE swift shift in global sentiment, high market volatility and fear of recession amid the US tariff shock indicate a 25bps cut by the Reserve Bank of India (RBI) on April 9, with possible change in stance to “accommodative” to give directional easing bias, a report showed on Tuesday.

- 

The Central Bank began its three-day Monetary Policy Committee (MPC) meeting on Monday.

“The extent to which this global trade war could stretch is unclear. Monetary policy may have to do the heavy lifting in India by being more countercyclical than fiscal this year. Implications for India could stem from both global financial market disruptions and real sector hit,” said, Emkay Global Financial Services in the note.

While there is scope for negotiation and de-escalation, we think this could be a pivotal turning point for emerging markets (EMs) assets in coming months”.