Views on RBI MPC Outcome By Vivek Rajaraman, Executive Director, Head - Client Advisory, Waterfield Advisors
Below the Views on RBI MPC Outcome By Vivek Rajaraman, Executive Director, Head - Client Advisory, Waterfield Advisors
"The August 2025 statement focused on caution and consolidation after previous rate cuts, highlighted lower inflation expectations, maintained growth estimates, and underscored emerging global risks, particularly from US trade policy, compared to the more proactive, optimistic tone of June. Despite RBI’s proactive monetary interventions, the slowdown in India’s nominal growth, validated by both corporate sector insights and declining corporate and income tax revenues, signals persistent domestic headwinds. While these measures aim to moderate the downturn and support recovery, their limited scope means that the broader global slowdown will continue to weigh on growth prospects.
The yield curve remains steep, with longer-term yields above 7% and short-term yields in the 5.5-6% range, reflecting ongoing market concerns around trade tensions, currency depreciation, and the global slowdown impacting India's economic outlook despite the RBI's monetary policy measures. The increase in yields today is consistent with cautious investor sentiment towards growth risks and external pressures."
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