Mumbai, Oct 14 || The Reserve Bank of India (RBI) may cut policy rates by 25 basis points in December, bringing the repo rate down to 5.25 per cent, if the 50 per cent import tariff remains in place until the end of the year, a new report said on Tuesday.
The data compiled by HSBC also suggested that the government could announce a fiscal package for exporters along with fresh economic reforms to support growth.
The report highlighted that inflation has fallen to its lowest level in years, giving the RBI more room to ease monetary policy.
Consumer Price Index (CPI) inflation for September stood at 1.5 per cent year-on-year (YoY) -- the lowest since June 2017 -- as food prices slipped into deflation.
The fall was mainly driven by easing vegetable prices, strong cereal production, and well-stocked granaries.