RBI likely to reduce policy rates after the Monetary Policy Meeting: Report
&imwidth=600&imheight=450&format=webp&quality=medium "RBI likely to reduce policy rates after the Monetary Policy Meeting: Report")
Reserve Bank of India (RBI) Governor Sanjay Malhotra Photograph: (ANI)
The Reserve Bank of India's monetary policy meeting: The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank.
A report by Union Bank of India has predicted that the Reserve Bank of India's Monetary Policy Committee (MPC) will reduce the policy rates by 25 basis points (bps).Thepolicy announcement is expected on Wednesday.
The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank.
"Our baseline view is of a 25bps repo rate cut in this meeting. The view is premised on another round of sharp downward revision in inflation projection for FY26," it predicted.
The expectation is built on the premise of another sharp downward revision in inflation projections for FY26, with estimates now closer to 2.5 per cent with a downward bias.
The revision also factors in the nearly 60 bps impact of the Goods and Services Tax (GST) on inflation.
The report said that the move will be aimed as a sentiment booster for the Indian stock markets. It is also called the US Federal Reserve policy decision, a risk management cut.
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The report also claimed that the RBI might cut at least another 25 bps by December of this year.
The bank further said in its report that low inflation, the positive impact of GST reforms, and growth challenges from ongoing tariff wars will prove to be the policy guidance.
The Monetary Policy Committee (MPC) of the Reserve Bank of India began its three-day monetary policy rate meeting. The announcement of the monetary policy outcome will be made on October 1.