RBI Likely To Further Ease Rates After A Brief Pause As Second Half Of FY26 May Need Additional Liquidity: Report

New Delhi: The Reserve Bank of India (RBI) is more likely to ease rates of interest additional after a short lived pause as the rustic might require further liquidity injection in the second one part of the monetary 12 months 2025-26 (H2 FY26), in step with a document titled Ionic Wealth through Angel One.

The RBI has already revised its inflation goal for FY26 right down to 3.7 in line with cent. For the primary quarter of FY26, inflation is projected at 2.9 in line with cent, and the common inflation for April and May is these days monitoring as regards to this estimate.

“We reiterate our view that a) the RBI will likely ease more after a brief pause, and b) more liquidity injection will be required in H2,” the document famous. India’s Consumer Price Index (CPI) inflation eased considerably to 2.82 in line with cent year-on-year in May 2025, down from 3.16 in line with cent in April 2025.

On a month-on-month foundation, inflation dropped through 35 foundation issues. Core inflation additionally declined fairly, coming in at 4.28 in line with cent in comparison to 4.36 in line with cent within the earlier month. The document highlighted that these days’s inflation print supplies the RBI extra space to improve financial enlargement, a long-standing fear.

The document cautioned, alternatively, that whilst home inflation drivers stay smartly controlled, world elements like geopolitics and industry offers may nonetheless affect long run inflation developments. “Some uncertainty lingers from imported inflation,” the document added.

One of the foremost participants to the decline in inflation used to be an additional easing in meals costs. Food inflation got here right down to 0.99 in line with cent in May from 1.78 in line with cent in April. A major factor in the back of this moderation used to be the steep fall in vegetable costs, which dropped 13.7 in line with cent year-on-year. Pulses additionally witnessed a worth decline of 8.2 in line with cent year-on-year, aided partially through a prime base impact. Cereal costs, whilst nonetheless expanding, confirmed a slower upward push of 4.7 in line with cent in May in comparison to 5.4 in line with cent in April.

The document attributed this general moderation in meals costs to stepped forward provide stipulations, strengthened through a powerful rabi harvest and favorable sowing stipulations for the kharif season.