RBI May Cut Repo, Keep Policy Stance Unchanged: Poll

A combination of easing inflationary conditions and tightening economic growth may prompt India's central bank to cut the policy rate in the upcoming meeting of its rate-setting panel, according to a Mint poll of 10 economists.

- Gopika Gopakumar

Added expectation: more rate cuts may happen this year than earlier anticipated.

The economists unanimously predicted that the Reserve Bank of India's (RBI) monetary policy committee (MPC) would announce a 25 basis points (bps) cut in the repo rate to 6% after it meets from 7 to 9 April, as inflation and growth estimates undershoot earlier forecasts. Further, economists from Barclays Bank did not rule out even a 35-bps cut.

It would be the second successive cut in repo rate after 7 February, when the MPC, headed by new RBI governor Sanjay Malhotra, finally cut the repo rate by 25 bps, the first such cut since May 2020. A basis point is one-hundredth of a percentage point, and the repo rate refers to the rate at which RBI lends money to commercial banks.

However, only three out of the 10 economists polled expect a change in policy stance to 'accommodative' from 'neutral' at present. An accommodative stance indicates RBI is ready to support growth by reducing interest rates.