Analysts See 25 bps Policy Rate Reduction by RBI Panel

Tight fiscal stance, lower inflation hope to open path for rate cuts

- BENN KOCHUVEEDAN @ Mumbai

THE Reserve Bank's rate-setting panel MPC on Wednesday began its three-day monetary policy review meeting - the first chaired by the new governor Sanjay Malhotra. Five of the six members of the panel are new.

The markets and Mint Road observers are expecting the first repo rate cut in nearly five years on Friday. The monetary policy committee has kept the rate high at 6.5% for the past 11 review meetings, raising it cumulatively 250 bps and stopped raising the rate in the February 2023 review when it had increased the rate by 35 bps to 6.50%.

The last time the RBI reduced the repo rate was in May 2020 by 50 bps to 4%.