Reserve Bank of India February rate cut on a knife's edge: Poll
BENGALURU - A February Reserve Bank of India rate cut is on a knife’s edge, with just under half of economists polled expecting easing at that meeting, and is highly likely by the middle of next year, according to a Reuters poll.
A firm majority, over 80% economists said the RBI will cut rates by end-June, with the median forecast for a 25-basis point trim to 4.90%, and then stay on the sidelines for the rest of the year. When asked what the central bank’s next move should be, instead of what the RBI will deliver, all but three of 45 economists also said a cut, with the median of those responses recommending 25 basis points.
“While multiple data shows lack of inflation pressure in the economy, onion prices - within the food component - have been the biggest driver of headline inflation and this cannot be influenced by monetary policy actions,” said Kunal Kundu, India economist at Societe Generale.
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