HT Bureau
GUWAHATI, April 9: In a recent commentary on the Reserve Bank of India’s (RBI) latest monetary policy decision, Sakshi Gupta, Principal Economist at HDFC Bank, highlighted the central bank’s shift toward a more accommodative stance in an official statement here on Wednesday.
The RBI’s decision to implement a 25 basis points (bps) rate cut, coupled with a change in its policy stance to accommodative, sends a clear signal that more rate cuts may be on the horizon.
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Gupta anticipates two additional rate cuts in 2025, with the next one likely to come in the June policy meeting.
The continued improvement in liquidity conditions is expected to play a crucial role, as the average liquidity is forecasted to remain above neutral in the current quarter.
This, she believes, will further drive the transmission of rate cuts into money market rates and deposit rates.
“As liquidity conditions continue to improve, expected to average above neutral in the current quarter, transmission of rate cuts to money market rates and for deposit rates is also likely to increase,” she said.
However, the RBI’s decision also takes into account the growing global economic risks, particularly due to tariff tensions.
As a result, the central bank has revised its GDP growth forecast down by 20 basis points to 6.5%.
Gupta cautioned that if global tensions continue to escalate, there could be additional downward pressure on growth projections.
“Recognising the increasing global headwinds due to tariff tensions, the RBI revised down its GDP growth forecast by 20bps to 6.5%. If global tensions continue to escalate, we see a further downside risk to these projections,” she added.
Looking ahead to FY26, HDFC Bank expects GDP growth to be around 6.3%, assuming some retraction in current tariff announcements and successful bilateral negotiations.
Gupta’s analysis indicates that while the RBI’s actions are aimed at supporting domestic economic growth, external challenges remain a significant factor in shaping future policy decisions.
