'Another 25-basis-point policy rate cut likely in February MPC'

There is a high probability that Reserve Bank of India (RBI) would go for another rate cut in the next monetary policy review meeting in February 2026, Bank of Baroda said in a report Friday, hours after the central bank Governor Sanjay Malhotra characterised India’s current macroeconomic moment as a “rare goldilocks period”.

- TBG NETWORK

The RBI Governor in his MPC statement noted that a “rare goldilocks” opportunity was provided in H1 2025-26 with solid growth and benign inflation.

“This largely motivated the RBI to reduce its policy rate by 25bps. Inflation outlook is largely optimistic with continued moderation in food prices and rangebound core inflation,” Bank of Baroda Economist Aditi Gupta wrote in the report.

On the other hand, growth prospects though bright, face some pressures due to the drag from higher US tariffs, she noted.