InvestorQ : With the Fed having cut rates, can we expect the RBI also to cut rates in India?
vaishnavi mhatre made post

With the Fed having cut rates, can we expect the RBI also to cut rates in India?

Answer
user profile image
diksha shah answered.
6 months ago


It is hard to say if RBI would immediately cut the rates or possibly wait for some time. The latest PMI Manufacturing has been quite robust at 54.5 and the PMI manufacturing has come in at 57.5. That is an indication that the bottoming out of growth has just about started. At this stage, the RBI and the government would not want to upset the applecart. If the decision is to immediately give a rate cut boost, then we may immediately see a rate cut. However, the RBI may also choose to hold on to rate cuts till there is some visible fall in inflation from the current levels of 7.5%. In that case, the RBI may take the call on rate cuts only after the inflation numbers are out in the middle of this month. However, the RBI has reasons to believe that inflation could be lower this month due to the bumper Rabi crop effect. That remains to be seen still.