ICICI Research says 16% drop in oil prices gives India’s MPC room to time policy normalisation

ICICI Research said Brent crude has fallen 16% since the June meeting of India’s Monetary Policy Committee and is now around USD 80-85 per barrel, citing easing geopolitical risks and a gradual reopening of the Strait of Hormuz. The report said the decline in energy prices has materially improved the inflation outlook. If oil stays near current levels and the conflict does not re-escalate, it said the MPC could lower its inflation forecast at the August meeting, reducing the likelihood of a near-term rate hike. The analysis focuses on how shifts in the policy path can feed through to commodity pricing.