look news india
There is a possibility of a rate cut in the third quarter due to expectations of a rise in core inflation. With food inflation high in India and seasonal concerns still on the radar, there is little chance of monetary policy easing in the near future. At present the repo rate is 6.5 percent. Core CPI (consumer price index) inflation may have eased to 3.2 per cent in April, but the rate may rise due to rising prices of several commodities, including crude oil and metals. There is a possibility of a rate cut in the third quarter of the current financial year following the possibility of a rise in the core inflation rate. Rising commodity prices have created another challenge. Especially when core inflation has bottomed out in the second quarter and is rising again. Experts expect the first rate cut to take place in December 2024 versus August 2024. For the second consecutive month, the core inflation rate has been recorded at 3.2 percent. Core inflation was expected to average between 3.5 per cent and 3.7 per cent in the first half of fiscal year 2024-25. Whereas in the second half this rate may remain 4.5 percent. The Reserve Bank of India (RBI) aims to maintain core retail inflation at 4 percent on a sustainable basis. According to the forecast, the CPI inflation rate is expected to average 4.5 percent in FY 2025.
Balance between growth rate of economy and inflation
* The Reserve Bank of India (RBI) aims to keep core retail inflation at 4 percent on a sustainable basis
* Food supply pressures and rising risks on key fronts pose downside risks to the forecast.
