Bank of America (BOFA) has provided its insights on the recent RBI meet, predicting a possible 25 basis points (bps) rate cut in December 2024. Despite some weak economic data, BOFA highlighted that the growth forecast remains unchanged, signaling confidence in the country’s economic recovery trajectory.
However, the report also notes that near-term inflation risks remain elevated, primarily due to weather-related disruptions. This suggests that while the RBI may proceed with a rate cut, the central bank remains cautious regarding inflationary pressures in the coming months.
The combination of stable growth forecasts and elevated inflation risk points to a complex balancing act for the RBI as it navigates through these economic challenges.
