RBI Policy Preview | Shraddha Umarji, Economist Institutional Research at Prabhudas Lilladher

Reserve Bank of India will likely keep repo rate unchanged at 6.5%. Stance will also be unchanged for better transmission of the delivered rate hikes (of 250 bps so far). Right now, food inflation is high so the biggest risk going ahead is monsoon. IMD has forecast normal monsoon for the year, so timely kharif sowing can bring down food inflation. Till then, RBI is unlikely to cut interest rates. The central bank will also take cues from what Fed and ECB are doing when it comes to rates. So it is unlikely that rate cuts will happen before October. However, RBI could change its stance to 'neutral' in June or August. Meanwhile, GDP growth for FY25 might be revised upwards to 7.3-7.4% from 7% earlier as all macroeconomic data has been robust.