Growth pangs put more rate cuts on radar in India

Bloomberg

A marked slowdown in Asia’s third-largest economy pushed growth concerns to the top of the Reserve Bank of India’s agenda, suggesting more policy easing will follow its third interest-rate cut of the year.
Governor Shaktikanta Das and the inflation-targeting RBI he leads is now squarely focussed on boosting investment and consumption after quarterly growth cooled to a five-year low at the beginning of 2019. A benign inflation outlook and a dovish turn by the US Federal Reserve strengthened the case for policy makers to switch to an “accommodative” stance, indicating further easing ahead.
The RBI was the first of the world’s major central banks to cut interest rates this year as Das identified early on the growth risks facing the economy. Since then Australia, New Zealand, Malaysia and others have followed as policy makers seek to shore up their economies against a worsening US-China trade war. Even the Fed is being pressured to ease, while European Central Bank President Mario Draghi said policy makers are “determined” to act if needed to support the euro zone’s economy.
“Clearly the slowdown has put growth in the forefront of the RBI’s thinking,” said Priyanka Kishore,
head of India and Southeast Asia economics at Oxford Economics Ltd. in Singapore “The dovish shift signals that the RBI is not done yet. The conditions for another 25 basis-point cut this year have ripened amid falling global oil prices and lower external financing pressures.”