- Monetary Policy Committee kept rates steady amid global and domestic uncertainties
- Inflation expected to rise from Q4 FY26, keeping rate cuts unlikely soon
- Global growth may slow in H2 due to tariffs, demand softening, and US inflation
With a neutral stance, policy remains data-dependent. Until growth risks worsen, a pause is warranted. Else a 25-bps cut in the next policy meeting in Oct'25. As there are many moving parts, being decisive on either side becomes difficult at this point of time.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
The Monetary Policy Committee held rates steady, signaling caution amid global headwinds and signs of domestic fragility. Commentary from the governor suggests that the bar for rate cuts remains high in lieu of inflation print expected to move higher from Q4 FY26 onwards.
Global growth momentum is likely to moderate in H2, with risks from tariff wars, softening demand, and renewed US inflation. Domestically, high frequency indicators point to mixed signals in underlying demand. Liquidity remains comfortable, but credit pick up seems to be deferred and expectation in H2 FY26, would see a pickup in credit buoyed by the sentiment around festive season.
The current pause reflects a calibrated, data-driven approach. With easing already frontloaded in the last policy, it seems MPC is preserving room for future rate action (if any).
Way Forward -
With a neutral stance, policy remains data-dependent. Until growth risks worsen, a pause is warranted. Else a 25-bps cut in the next policy meeting in Oct'25. As there are many moving parts, being decisive on either side becomes difficult at this point of time.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
