India CPI inflation dips to 4.1% in May - opens door for rate cut in August policy
Lower food prices and easing core inflation suggest RBI may have room to cut rates by 25bps at the August MPC meeting.
The latest CPI inflation data for India came in at 4.1% for the month of May, significantly lower than the previous month. This easing is largely driven by a drop in food prices and a stabilization of core inflation. With the RBI's target band comfortably met, analysts are now pricing in a potential 25 basis point rate cut at the upcoming August Monetary Policy Committee (MPC) meeting. This move would provide a significant boost to rate-sensitive sectors such as banking, auto, and real estate.
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