RBI may shift policy stance to ‘neutral’ by June, deliver rate cuts starting August: Nomura
Japanese brokerage firm reiterated its earlier view of rate cuts being expected from August onwards, and pegged the quantum of cuts at 1 percentage point. "We expect 1 per cent of rate cuts cumulatively starting August, with a change of stance to 'neutral' in Q2, with risks skewed towards earlier easing," PTI quoted Nomura analysts as saying.
The brokerage firm said the core inflation for December came at 3.8%, and the annualized growth of super-core inflation has dipped below 3% by its estimates which is a "positive surprise". For January 2024, Nomura expected the headline inflation to cool-off to about 5%, while the core is pegged at 3.5%.
The Japanese brokerage firm said there is a need to pivot towards an easier regime, adding that the Indian apex bank may choose to make the liquidity less tight, change its stance to neutral and also deliver on the rate cuts as part of this. "Overall, the December CPI data were softer than expected, with the incremental pick-up driven by a rise in some food categories.
Read more on livemint.com
