India is moving towards reducing the first policy price within about five years

The central bank in India is likely to reduce standard interest rates in its current political meeting, as inflation provides an area to stimulate the struggling economy, although the rupee is hovering at the lowest levels.

Timor Paige, chief economist at DBS, said that the Indian Reserve Bank is about to reduce the rate of ribo by 25 basis points to 6.25 %, as it concludes its political meeting on Friday, which led to the “shallow price reduction cycle.”

Indian bonds have risen in recent weeks with a 10 -year standard of return by 16.5 basis points in about three weeks To 6,664 % from Wednesday, according to LSEG data, where traders intensified the bet to reduce the interest rate at the February meeting.

If the Australian Reserve Bank reduces decrease rates, this will be the first reduction in nearly five years. Central Bank Latest rates in May 2020 He also fought the country from the Covid-19 stagnation that retreated from the epidemic.

Investors will also examine the new RBI governor's statement Sanjay Malhotra to assess the bank's monetary policy. Malhotra He took responsibility in December.

“It will be interesting to know whether RBI continues to show the ruler, regardless of the statement of monetary policy, as a tool for political communication,” said Goldman Sachs.

Wall Street expects to reduce a quarter of a percent this week, as well as the transformation of monetary policy into a “equal” position on “Neutral”. It also wanders in the 25 Pasis cut in April.

The standard ribo rate has been fixed at 6.5 % over the past two years, as the domestic inflation rate has been higher than the 4 % central bank, and even violating the 6 % upper tolerance of RBI in October.

“The delay in implementing the global definitions by the incoming American administration provides some tactical space for RBI to determine the priorities of local growth … and space to reduce policy rates.”

The most enlarged inflation readings provided some field to reduce RBI rates, while it is also the first policy meeting yet Malhotra took responsibility For three years.

His predecessor, Shakkanta Das, maintained fixed interest rates for about two years at the end of his work period for six years.

At the latest Monetary Policy meeting in RBI in December, The price plate maintained the main interest rate without changing the division decisionWith a 50 -point cash backup rate to 4.0 %, which effectively relieves cash conditions.

Pagoria said the new higher monetary policy can give “MPC a new look, but also a different approach.”

Malhotra remained somewhat tight on his view of monetary policy, But he admitted in the financial stability report in December Reducing inflation and the possibility of monetary policy flexibility was positive developments.

The ruler also warned that medium -term economic expectations are still difficult, noting the risks, including the high geopolitical conflicts and financial market disturbance.

He has And according to what was reported One of the tools of inflation and growth in the central bank is trying to reduce drop errors.

RBI has Act to implement large interventions In the foreign exchange market to help expand possible sudden flows of foreign capital and avoid any sharp decrease in the currency.

“It seems that the level of fluctuation that takes the intervention has turned up,” said Pagoria Pova.