New Delhi, Dec 20 || Unless there is a serious crumbling of growth dynamics, the current interest‑rate cut cycle of the Reserve Bank of India (RBI) is over and the central bank will likely maintain a long pause with its stance at “neutral”, a report said on Saturday.
The report from Yes Bank said that a new consumer price index (CPI) with lower food weightage could limit the comfort derived from falling food prices and reduce scope for further rate cuts unless growth weakens materially.
The RBI's moves to keep liquidity comfortable and anchor the operative rate to the repo rate is expected to continue.
"The minutes of December meeting highlight RBI’s commitment to maintaining the growth momentum. While the growth surprised on the upside in the first half, it is expected to soften in the second half," the report noted.
MPC members had noted that inflation remains below the lower bound of FIT and thus necessitates counter-cyclical action from the central bank.
The RBI sees headline as also core retail inflation in the first half of FY27 to be anchored the 4 per cent mark.