Nomura no longer expects India’s central bank to cut rates in April, it said on Friday, as inflation is expected to rise and given the “stealth” policy easing that has already taken place. This comes after India on Thursday released consumer price inflation data under a new series, which changes the weighting on key goods like food and housing and adds several online services for the first time to reflect changing consumption patterns.
Nomura has raised its inflation projection for the next fiscal year, which begins in April, to 4.1 per cent from 3.9 per cent based on the old series.
Last week, Nomura had assigned a 65 per cent probability that the Reserve Bank of India would cut its policy rate by 25 basis points to 5 per cent.
It now joins the likes of Capital Economics and ANZ in no longer expecting an April rate cut.
Nomura said that “stealth easing” toward a 5 per cent rate has effectively already taken place, strengthening the case for the RBI to pause.
The RBI targets the weighted average call market rate around the repo rate. The call rate has been around 5 per cent over the last few days, the floor of the monetary policy corridor, reducing the need for rate cuts, the brokerage said.
Nomura expects a 10-basis point upside to its inflation forecast for the January-June period under the new series, which increases to 20-50 bps in the second half of the fiscal year.
The brokerage points out that one-year forward inflation is expected to inch back below 4 per cent, limiting the need for a rate hike.
The RBI targets inflation in a 2 per cent-6 per cent band.
Published on February 13, 2026
