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The RBI is seen extending the easing cycle in the next months and is likely to cut the interest rate once again in Q4 2019, as expressed by Researchers at UOB Group in the Quarterly Global Outlook.

Key Quotes

“We downgraded our full-year growth outlook to 6.0%, down from an initial outlook of 6.8%, below RBI’s growth forecast of 6.9%”.

“We view inflation to average 3.4% in H2 2019/20, at the lower bound of RBI’s H2 outlook range of 3.4 – 3.7%. Should this come to pass, India’s inflation rate will average 3.2% in FY2019/20, the lowest since FY 1978/79″.

“RBI has cut rates by a cumulative 110bps since the year started. On the back of softer growth and inflation environment seen to-date, we pencil another 25bps rate cut in 4Q19“.