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RBI keeps rate options open as growth seen at 6.6%: Crisil
Crisil expects India's GDP growth to ease to 6.6% this fiscal from 7.7% last year, citing slower demand and global headwinds. The report says the Reserve Bank of India may remain flexible…
The Story in Brief
Crisil expects India's GDP growth to ease to 6.6% this fiscal from 7.7% last year, citing slower demand and global headwinds. The report says the Reserve Bank of India may remain flexible on policy rates as the economy faces heightened cost pressures, a challenging export environment, and risks from a below-normal monsoon.
Financial conditions improved in July, with net FPI inflows surging to USD 4.2 billion, the highest since September 2024. Systemic liquidity widened, bond yields fell 12 bps to 6.77%, and money market rates softened. However, the rupee depreciated 0.9% against the dollar, and the West Asia conflict remains a key risk for capital flows and oil prices.
The Indian Opinion
The slowing growth forecast will revive demands for a rate cut, but inflation at 4.45% is still above the RBI's 4% target, and global crude remains volatile. The next MPC decision, due before October, will show whether the RBI leans towards supporting growth or containing prices. Watch the August retail inflation number and any escalation in West Asia.
Source: economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
