Interest rates need to be lower given benign inflation outlook: RBI governor

RESERVE Bank Governor Sanjay Malhotra has voted for the 25 bps repo rate cut earlier this month saying real interest rates needs to be lower given benign outlooks for both headline and core inflation.

- ENS ECONOMIC BUREAU @Mumbai

At the December 3-5 monetary policy meet, the RBI’s Monetary Policy Committee unanimously voted to lower policy rate by 25 bps, taking total reduction since February to 125 bps to 5.25%. The panel has also revised downwards its inflation projection for FY26 to 2% from 2.6% projected earlier, apart from revising upwards the growth forecast by 50 bps to 7.3%.