Rising global risks, including the rise in crude oil prices, may delay RBI’s rate cuts, analysts said.

“While we maintain our call for a 50 bps rate cut starting in 3QFY25, we note increasing risks of further delays to the RBI’s rate cuts from rising crude oil prices, a further push-back to the timing of the US Fed’s rate easing cycle and volatile food inflation,” Kotak Institutional Equities said.

“In the near term, we see upside risks to our 1QFY25 average inflation of 5 per cent from the high temperatures causing volatile food inflation, geopolitical risks and ongoing OPEC plus supply cuts pushing up crude oil prices and higher non-energy commodity prices. These risks could continue to pose a challenge to the last mile disinflation, as noted by the RBI Governor as well,” the brokerage said.

March headline inflation, as expected, moderated to 4.9 per cent, while core inflation moderated marginally to 3.3 per cent. “We continue to expect only a gradual moderation in headline inflation,” the brokerage said.

Motilal Oswal Financial Services said in a report that inflation and IIP data were in line with expectations, which does not imply any major impact for monetary fiscal policy.

“We expect CPI to average 4.5 per cent next year. In our view, a rate cut may happen only in late FY25,” the brokerage said.