Reserve Bank of India Eases

Reserve Bank of India Eases

October 4, 2016

Markets had not been anticipating a policy change at the latest central bank review, but the Board of Directors agreed instead to enact their second 25-basis point reduction of India’s repo lending rate to 6.25%. The prior cut was done in April, and four cuts during 2015 totaled 125 basis points. In explanation, a released statement notes a downturn in food price inflation during August and lays out a likely inflation path the puts such at the 5% by next March with risks to the forecast tilted less severely to the upside than perceived at the time of prior reviews. Projected growth in the current fiscal year is robust at 7.6%. The next policy review is slated for early December.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Reserve Bank of India




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