RBI Poised for Rate Cuts: A Window of Opportunity
The finance ministry suggests the Reserve Bank of India (RBI) has room to further cut interest rates as inflation remains below its 4% target. Retail inflation hit a six-year low, allowing for continued rate easing. Meanwhile, global crude oil prices and government revenue remain stable despite tax cuts.
- Country:
- India
The finance ministry has announced that the Reserve Bank of India (RBI) can further reduce interest rates since inflation comfortably sits below the 4% target mark.
Since February, retail inflation based on the Consumer Price Index (CPI) has remained under 4%, recently dipping to a six-year low of 2.82% in May. The ministry noted that core inflation is subdued, suggesting room for sustained rate cuts.
In the global arena, crude oil prices are expected to remain stable due to OPEC's decision to hike production, while on the fiscal front, the Indian government maintains capital expenditure momentum despite tax cuts, ensuring revenue continues its double-digit growth trajectory.
(With inputs from agencies.)
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