The Report presents the change in stance of the RBI’s MPC to “Neutral” from “Withdrawal of Accommodation” as establishing the conditions for a rate cut. The numerous caveats however show that a rate cut may not be imminent, and the timing could depend on geopolitics, inflation, and growth. The note goes on to present slight risks which are emerging for inflation owing to domestic food pressures and global commodity price volatility. On the growth front, it brings forth the moderate performance in H1. While acknowledging numerous drives for growth in H2, it indicates a downside risk to RBI’s projection for FY25. It concludes with a view on softening yields and steepening yield curve, announcing that a golden era of corporate bonds may be beckoning us.
