Udaipur : HDFC Bank chief Economist, Sakshi Gupta, has said that The RBI delivered a rate cut in line with our expectations, recognising the impending risks to growth and utilising the monetary space yielded by low inflation. While GDP growth had inched up above 8% in Q2 FY26, the risk from external headwinds on exports continue to linger on. Moreover, the sustainability of the consumption pick-up during the festive season remains to be seen. Given this backdrop, the rate cut rightly provides a further counter-cyclical push to consumption and growth.
Commenting on this monetary policy committees (MPC) Sakshi Gupta said, We anticipate inflation to remain below 4% up till the middle of the year which suggests that space for another rate cut remains in a situation that growth shows signs of faltering in the coming quarters. Alternatively, if the recent economic momentum continues combined with a favourable trade deal announcement, this could be the end of the rate cut cycle. We expect GDP growth at 7.3% in FY26 and 6.5% in FY27. Inflation is expected at 2% in FY26 and 4% in FY27.
The durable liquidity infusion through OMO purchases and buy/sell swap are likely to help aid greater transmission of this rate cut, offsetting the drag from its recent FX intervention, and ease some of the upward pressure in the bond market.
