No rate cut seen in February: SBI

The interest rate cut by the Reserve Bank of India (RBI) is unlikely in February due to the persistent inflation, SBI Research stated in its latest report, adding that a slight easing in inflation is expected starting in January.

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The report adds that inflation is likely to average around 4.8 percent to 4.9 percent for financial year 2025, higher than the RBI target of 4.5 percent. It adds that the ease in inflation from January will be supported by base effects rather than a significant cooling of underlying price pressures.

"Inflation is only likely to dip from January onwards, but this will be driven by base effects. We are now less hopeful of a February rate cut. We believe the first rate cut is now effectively pushed back beyond Feb'25," the report adds.