RBI Seen Delaying Rate Cuts Despite Eventual Fed Easing
• India's overnight swap market signals RBI will not rush to cut rates even if Fed cuts rates in 2023 • RBI expected to start cutting rates in Q3 2023, with total 2024 cuts at 50 bps vs Fed's 125 bps • RBI still focused on Indian inflation, growth and macro dynamics rather than following Fed • Retail inflation in India expected above 6% in Nov and Dec, limiting RBI's scope to hint at dovishness • India has strong 7.6% Q3 economic growth, so RBI rate cuts expected to be shallow even when they start