Published:
Indian central bank cuts repo rate, warns of further easing ahead
Inflation will be a key determinant.
According to BBVA, the Reserve bank of India (RBI) cut its benchmark repo rate by 25 bps to 7.5% following a 25 bps cut at the RBI’s last policy meeting in January as inflationary pressures abate and the government executes much-needed fiscal reforms.
The research firm noted how the accompanying policy statement struck a cautious tone, hinging further policy easing on favorable inflation and current account dynamics.
"Combined with political turmoil brought about by the withdrawal of a minority political party of its support for the ruling coalition, the statement kept sentiment weak, with the Sensex fall by 1.5%," said BBVA.
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