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INDIA: ANZ, HSBC Both Expect Another 25bp Rate Cut in April

INDIA
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  • ANZ note that the decline in CPI inflation vindicated the RBI’s 25bp rate cut last week and also implies from a growth-inflation perspective that there is scope for greater monetary policy support to the economy. They add that the MPC will likely cut the repo rate again in April 2025 by 25bps, while ensuring adequate liquidity in the banking system to aid transmission to bank lending and deposit rates.
  • HSBC expect a continued fall in food prices to offset the inflationary impact of currency depreciation, noting that the February inflation print is trending even lower, at 4%, and that vegetable prices have fallen by 0-14% in the first 10 days of the month. They expect another 25bp rate cut in the April policy meeting.
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  • ANZ note that the decline in CPI inflation vindicated the RBI’s 25bp rate cut last week and also implies from a growth-inflation perspective that there is scope for greater monetary policy support to the economy. They add that the MPC will likely cut the repo rate again in April 2025 by 25bps, while ensuring adequate liquidity in the banking system to aid transmission to bank lending and deposit rates.
  • HSBC expect a continued fall in food prices to offset the inflationary impact of currency depreciation, noting that the February inflation print is trending even lower, at 4%, and that vegetable prices have fallen by 0-14% in the first 10 days of the month. They expect another 25bp rate cut in the April policy meeting.