Gloomy outlook for growth and inflation may dampen market sentiment

Since higher customs duties will result in the US suffering inflation, it's also possible the US Federal Reserve will review its stated policy of policy rate cuts

The RBI’s MPC held the repo rate unchanged and continued with its neutral monetary stance, scheduling a CRR cut to be implemented in two tranches. However, the outlook was gloomy and may be a dampener for sentiment.

 

The MPC warned about rising volatility in global markets, and cut its GDP outlook for financial year 2025 (FY25) by 60 bps although it hinted at possible recovery from Q4FY25 onwards. While the decision to hold the policy repo rate at 6.5 per cent was taken 4-2 with two members wanting a cut, the decision to continue with the ‘neutral’ monetary policy stance