Inflation is expected to stay below 4%, which may give the RBI room to cut interest rates twice, once in June and again in August.

Axis Bank’s Neeraj Gambhir sees a 50 bps rate cut as likely, calling a full 100 bps cut “premature,” noting that markets are pricing 50–75 bps over the next two months.

ICICI Securities’ Abhishek Upadhyay also expects two rate cuts, but believes the RBI will be cautious even if inflation trends allow for more easing.

A repo rate of 5.50% is seen as moderate, with the effective rate likely between 5.25% and 5.50%.

On bond yields, Upadhyay sees 10-year yields bottoming at 6.10%–6.20%, possibly rising later as market expectations shift.

Gambhir expects yields to stabilise around 6%, with little chance of falling below that level due to continued rate cut expectations and no hike in sight for the next 12–24 months.

Upadhyay sees mild near-term depreciation on the rupee, expecting it to stabilise around 85–86 due to higher domestic inflation compared to global peers.

Gambhir notes that a strong dollar weakens the rupee, while a stronger yuan helps ease pressure. He expects short-term rupee volatility but no major movement in the next few months.

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