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Below the Commentary on CPI  by Namrata Mittal, Chief Economist, SBI Mutual Fund

“In our assessment, while the RBI’s proactive approach to managing liquidity is encouraging, RBI has been highly calibrated on rate cuts. We suspect that growth in FY26 would underwhelm expectations. Despite a cumulative 100 basis points of easing, the real policy rate remains elevated. The RBI has shifted its stance to neutral at a time when the economy is receiving little support from fiscal stimulus or export momentum. In this context, further rate cuts are still in the cards. After lofty moves in June, RBI may opt to wait and watch in August policy. That said, increasingly, market is worrying on lack of demand for credit. We think that by September, the distribution of monsoon and its consequent impact on food inflation would be somewhat clear. Hence, we would still be pencilling additional 50bps of rate cut in FY26 post the Kharif season. It's worth recalling that in both the 2015 and 2019 easing cycles, credit growth remained subdued despite ample liquidity, largely because the magnitude of rate cuts was modest.”

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