Economists struck a note of caution, pointing out that the drop was largely due to the base effect of high inflation last year and that it could head back up in the coming months. Retail inflation based on the Consumer Price Index (CPI) in July 2023 was 7.44% while that in June this year printed at 5.08%.
Market expects one more rate cut as inflation stays benign
Indian economists and bond market experts expect another quarter percentage point cut in policy rates. This follows the Reserve Bank of India’s recent rate reduction