look news india
Mumbai: S&P Global Ratings has forecast that the Reserve Bank of India (RBI) will cut interest rates at its October meeting. India's strong economic growth will help the Reserve Bank keep inflation under control, it said in its Economic Outlook for Asia-Pacific.
High food inflation is a matter of concern for the Reserve Bank. S&P also said that unless there is a meaningful and long-term decline in food prices, it will be difficult to maintain inflation at the target level of four percent.
It has also projected inflation to average 4.50 per cent in the current financial year. The Reserve Bank's Monetary Policy Committee (MPC) meeting is being held between 7 and 9 October. The Reserve Bank has maintained the repo rate at 6.50 per cent since February 2023. After the US Federal Reserve cut the repo rate by half a percent, the market expects the Reserve Bank to also cut the repo rate.
RBI is also expected to cut interest rates twice in the current financial year.
While the Federal Reserve has already started cutting interest rates in the UK, Canada and the Eurozone, industries, especially the auto industry, and borrowers are also expecting the Reserve Bank to do the same.
Meanwhile, S&P has maintained its economic growth forecast for India at 6.80 per cent for the current financial year. Apart from this, the forecast of 6.90 per cent has also been maintained for the financial year 2025-26. India's strong economic growth is also expected to help the RBI in controlling inflation. India achieved a strong growth rate of 8.20 per cent in the last financial year.