India's central bank may postpone any potential rate cuts until at least February, according to economists. This decision reflects concerns over rising imported inflation, stemming from a weakening rupee and elevated U.S. bond yields. The economic environment was further influenced by the election of Donald Trump, who has supported imposing higher tariffs. The combined factors present a complex scenario for the Reserve Bank of India as it balances inflationary pressures with growth considerations.
Reserve Bank of India (RBI) Governor Shaktikanta Das indicated that inflation for October may surpass the 5.5% mark recorded in September. The path to achieving a sustained reduction in inflationary pressures has become more challenging, particularly following Donald Trump's election victory, which raises the possibility of increased U.S. borrowing costs and consumer prices. These developments potentially limit the scope for rapid rate cuts in the United States, further complicating global economic dynamics and India's monetary policy considerations.
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