Analysts predict 25bps repo cut next week as US tariffs won't affect monetary policy

MUMBAI: Even though the final punitive tariffs announced by the US for India average 27%, which is much higher than anticipated, this will have some impact on the growth outlook. However, Mint Road observers are unanimous in predicting a 25-basis point rate cut next week, as the impact of the trade war on prices will be negligible, ensuring that inflation will continue to trend down. After almost five years, the Reserve Bank-led monetary policy committee under the new governor Sanjay Malhotra had effected a 25 bps repo rate cut in its February review, bringing down the key policy rate to 6.25%. “Our early assessment of the impact of the tariffs is negative for some sectors such as steel, non-ferrous metals, auto components and cut and polished diamonds and this poses a mild downside risk to our growth forecast.