The June meeting of the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC)takes place amid unusual circumstances. We expect that RBI will respond to this with a third straight 25bps repo rate cut. The argument for a rate cut is bolstered by the need to address weakening credit availability. RBI’s inflation forecasts are close to the lower end of current market projections, and we do not see much room for these numbers to be lowered. The MPC under governor Shaktikanta Das might make greater use of the +/-2% range around RBI’s inflation target of 4% to help propel growth.

Source: Mint June 02, 2019 18:57 UTC