RBI likely to cut rates to counter Trump's tariff impact
The Reserve Bank of India (RBI) is likely to lower its key interest rate by 0.25% in an upcoming decision, as a way to help the economy cope with fresh challenges—mainly the 25% tariffs on Indian goods announced by US President Donald Trump.
Most experts thought rates would stay put after June's cautious stance, but these unexpected tariffs have many now expecting a small rate cut.
RBI is weighing all this carefully
India's inflation has stayed low—just 2.1% in June and below RBI's target for five months straight—which gives RBI some breathing room.
But those US tariffs could slow India's growth by about 0.3%, making things tougher compared to countries like Vietnam.
The RBI is weighing all this carefully, aiming to balance growth and keep prices stable despite global uncertainty.