India Monetary Policy: October 2016

The RBI cut the policy rate by 25bp to 6.25% at the October meeting.

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The RBI cut the policy rate by 25bp to 6.25% at the October meeting. This decision was chaired by the 6-member Monetary Policy Committee under the newly-appointed Governor, Urjit Patel.  While committed to the medium term inflation target of 4%+/-2%, there was a specific mention of supporting growth. NAB Economics is forecasting one more rate cut to 6% by the end of March 2017.  The main risk to the forecast stems from higher than expected food price inflation.

For further details, please see the attached document.