MPC Hints at December Rate Cut as Inflation Eases
The Monetary Policy Committee (MPC) has hinted at a potential rate cut in its December meeting, marking a shift towards a more accommodative stance. The October review noted a 'sobering of inflation', providing 'greater leeway for monetary policy to support growth'.
Two external members of the MPC voted in favor of changing the stance to 'accommodative', indicating a dovish bias. Economist Michael Patra is likely to support a rate cut in the December meeting, with ICICI Bank estimating a 30% probability of a 25 basis points cut.
The MPC is likely to consider a rate cut in December, with the extent of easing dependent on growth dynamics and external challenges. If external headwinds persist and growth decelerates, the MPC is prepared to act. The odds of further monetary easing have increased, as reflected in the shift in the MPC's policy language.
GST rate cuts are expected to support consumption but may only partially offset the negative impact of US tariffs on the international economy.
Governor Sanjay Malhotra has confirmed that 'some room has opened for easing', with the next action to be decided in December. The current space looks to be for a 25 basis points rate cut, with a further reduction possible if growth slows more sharply.
Read also:
- Unveiling the Less-Discussed Disadvantages of Buds - Revealing the Silent Story
- Grid Risk Evaluation Strategy By NERC Outlined, Focusing on Potential Threats from Data Centers
- Rapid Expansion in Organic Rice Protein Market Projected at 15.6% Through 2034
- Vantor & Lanteris Fuel US Intelligence with Innovative Tech
