RBI unlikely to cut rates before June: Deutsche Bank

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Key Points

According to the report by Deutsche Bank, the interest rate cycle appears to have peaked and the Reserve Bank of India (RBI) is unlikely to go for further hikes, unless absolutely necessary..

With the RBI continuing to maintain tight liquidity, short-term rates are hovering around 6.85-6.9 per cent, which is 35-40 bps higher than the repo rate...

"We see the central bank cutting the policy repo rate by 75 bps in 2024 and another 25 bps in early 2025..

Earlier, we were expecting a 100 bps of repo rate cut in 2024 itself, starting from April 2024, but given that the Fed is likely to start cutting rates from June 2024, we have pushed back the start of the rate cut cycle to June 2024," the analysts said...

"We now expect 25 bps rate cuts in each of the quarters beginning from Q2 of 2024 totalling 100bps of easing in FY25, which will likely bring down the repo rate to 5.50 per cent by early 2025," they said...

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