The Organization of Petroleum Exporting Countries or OPEC stated in a latest monthly update that for India, monetary easing is expected to play an important role in mitigating the tariff-related impact and supporting growth going forward as well. With inflation projected to remain below 4%, the Reserve Bank of India cut its key policy rate from 6% to 5.5% in June and will possibly lower rates further to around 5.25% by year-end. However, against the backdrop of its latest 'neutral' stance, this will be data-dependent. Inflation projection shave been revised down to 3.5% for 2025, though it is anticipated that base effects may push inflation higher in 2H26. On the external front, a narrower current account deficit of below 1% of GDP is now expected, thanks to strong services exports, with the Indian rupee projected to maintain its current level of around 85 against the USD in the near term, OPEC noted.
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