IGI Logo

Below the quote on MPC's Inflation Focus from Mr. Kaushik Mehta Founder & CEO of Ruloans Distribution Pvt. Ltd.

The prediction of FY24 CPI inflation rising to 5.4% has made it less likely for interest rates to be lowered in the current calendar year. This change indicates a possible shift in focus towards addressing higher inflation, rather than considering rate cuts. We need to Keep an eye on future updates as the situation evolves.
 

The rate cut cycle might be delayed, as the Monetary Policy Committee (MPC) reaffirms its dedication to maintaining the 4% inflation target. This suggests that the focus remains on controlling inflation before considering any reduction in interest rates.

Given the MPC's renewed commitment to maintaining the 4% inflation target and the recent revision of FY24 CPI inflation forecast to 5.4%, the likelihood of an imminent rate cut appears diminished. The central bank's emphasis on addressing inflation concerns suggests that any rate cut could be delayed until a more stable economic environment is achieved. However, the exact timing of future rate cuts remains uncertain and will depend on the evolving economic conditions and inflation outlook.

Above views are of the author and not of the website kindly read disclaimer