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Below the Views on the RBI Monetary Policy Committee by Manish Chowdhury, Head of Research, StoxBox

An unexpected change in monetary policy stance from “Withdrawal of Accommodation” to “Neutral” has provided leeway to the RBI for a rate cut going ahead. However, we believe that a December rate would hinge upon multiple factors aligning including the trajectory of food inflation, the global economic and monetary policy setting and major commodity prices including crude oil and metal. With high frequency indicators showing signs of fatigue recently, we believe that the upcoming festive season would be a crucial factor in deciding the possibility of any downward revision to economic growth forecast. Though the central bank has tried hard to downplay an early rate cut expectation, our sense is that a rate cut in Q4FY25 is on cards, with the probability of the event happening in December looking evenly balanced.
 

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