A rate cut by the Reserve Bank of India (RBI) is unlikely even in February due to the ongoing inflationary pressures, according to a recent report by SBI Research. The report states that while inflation is expected to ease slightly from January 2025, it will be largely driven by base effects, rather than a significant cooling of underlying price pressures.

SBI Research forecasts that inflation will average around 4.8 percent to 4.9 percent in the financial year 2025, which is still above the RBI's target of 4.5 percent. The easing of inflation from January onwards is expected to be gradual, largely owing to base effects from the previous year. This has led the research team to revise its expectations regarding a rate cut in February, with the first rate cut now anticipated to occur later than initially expected.