Key Points
RBI policy meet starts tomorrow: The Reserve Bank of India (RBI) might only consider cutting rates in the third quarter of fiscal year 2025 (Q3FY25), as historical trends suggest that interest rates in emerging economies change with a lag of two months in response to rate changes in developed economies like the US and the UK, according to a report by SBI Research..
SBI believes the RBI will maintain the policy stance as 'withdrawal of accommodation' and the first rate cut will occur in Q3FY25..
Moreover, the rate-cut cycle could be shallow..
However, SBI Research underscored that India is a "notable exception to strong evidence of emerging economy central bank rate actions being predicated by advanced economy central bank rate actions"..
PCE, which strips volatile food and energy prices, rose 0.3 per cent in February, after rising 0.5 per cent in January, marking its biggest back-to-back gain in a year time," SBI observed..
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