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INDIA: Goldman Sachs Expect 25bp Rate Cuts in February and April

INDIA
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  • Goldman Sachs see the latest liquidity measures as a decisive turn in the monetary policy easing cycle by the RBI. Going forward they expect overnight rates to trade at or below the repo once the RBI starts with its policy rate easing cycle.
  • They expect a 25bp repo rate cut in February 2025, followed by another 25bp in April, with risks skewed towards more easing if the central government sticks to its fiscal consolidation path in the union budget on Feb 1.
  • Goldman Sachs further expect the RBI to keep liquidity in surplus and let the overnight inter-bank rate fall 25bp below the repo rate, to the bottom of the liquidity adjustment corridor.
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  • Goldman Sachs see the latest liquidity measures as a decisive turn in the monetary policy easing cycle by the RBI. Going forward they expect overnight rates to trade at or below the repo once the RBI starts with its policy rate easing cycle.
  • They expect a 25bp repo rate cut in February 2025, followed by another 25bp in April, with risks skewed towards more easing if the central government sticks to its fiscal consolidation path in the union budget on Feb 1.
  • Goldman Sachs further expect the RBI to keep liquidity in surplus and let the overnight inter-bank rate fall 25bp below the repo rate, to the bottom of the liquidity adjustment corridor.