RBI may reduce policy rate in fourth quarter of 2024

May 29, 2023 14:47

Global forecasting firm Oxford Economics on Monday said the RBI may cut key benchmark policy rate in the fourth quarter of the current calendar year as a mix of factors will allow the central bank to shift focus and adopt a more accommodative policy stance sooner.

It further said inflation has already begun easing, and consumer inflation expectations are falling, so attention has shifted from estimating the peak level of the current hiking cycle to the timing of rate cuts.

"We are updating our baseline view for India to include a first rate cut by the RBI in Q4 2023. "We think a mix of factors will allow the RBI to shift focus and adopt a more accommodative policy stance sooner," Oxford Economics said. It noted that despite easing price pressures recently, risks to inflation over the remainder of the year are to the upside.

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