India is heading for the first policy in four years

India’s central banks may lower benchmark interest rates at ongoing policy meetings, as loose inflation provides room for the economy, even as the rupee hovers at record lows.

Taimur Baig, chief economist at DBS Bank, said the Reserve Bank of India is expected to raise the repurchase rate by 25 basis points at its policy meeting on Friday, thus “reducing the cycle of lowering tax rates”.

Indian bonds gather in recent weeks, with 10-year benchmark yields falling by 16.5 basis points in about three weeks By 6.664 closed on Wednesday, traders stepped up their bets as traders lowered their downgrade rates at their February meeting, according to LSEG data.

If the RBI rate is lower, it would be the first cut in nearly five years. Central Bank Finally lowered the rate in May 2020 The country’s decline was when the country was in trouble with the Common 19th.

Investors will also review the statement of new Reserve Bank of India Governor Sanjay Malhotra to assess the direction of the bank’s monetary policy. Malhotra Responsible in December.

“In addition to the monetary policy statement, it would be interesting whether the Reserve Bank of India continues to continue to the Governor’s statement, which is a tool for policy exchange,” Goldman Sachs said.

Wall Street banks are expected to cut cuts by a quarter-century year this week, and a “adaptive” stance of monetary policy turning into a “neutral” easing. It also cut 2 items on the 25 basis in April.

The benchmark repurchase rate has remained stable at 6.5% over the past two years as domestic inflation has exceeded the central bank’s medium-term target of 4%, and even violated the Reserve Bank of India’s upper limit in October 6%.

“The upcoming delay in implementing universal tariffs by the U.S. government provides some tactical space for RBI to prioritize domestic growth … and room to lower policy rates,” said Ruhul Bajoria, an Indian American economist.

The soft inflation-style reading provides some room for RBI to lower interest rates, which is the first policy meeting afterwards Malhotra is in charge Term of office is three years.

His predecessor, Shaktikanta Das, has maintained steady interest rates at the end of six years.

At the recent monetary policy meeting held by the Reserve Bank of India in December The panel of interest rate settings keeps key interest rates unchanged during split decisionswhile reducing the cash reserve ratio by 50 basis points to 4.0%, effectively mitigating monetary conditions.

Bajoria said the new senior monetary policy leadership could make “MPC updates, but it could also be a different approach.”

Malhotra remains fairly nervous about his monetary policy perspective But he acknowledged in his December Financial Stability Report The potential for loose inflation and monetary policy flexibility is positive development.

The governor also warned that the medium-term economic outlook remains challenging, citing risks of geopolitical conflicts and financial market turmoil.

He is too Reported to review Central Bank inflation and growth forecasting tools to minimize projection errors.

RBI has Take action to implement numerous interventions In the forex market, it helps to buffer potential foreign capital outflows and avoids sharp currency declines.

“The level of volatility in the intervention seems to have been higher,” said Bofa’s Bajoria.