‘Growth-inflation data will determine MPC’s future actions’

While inflationary expectations remain well anchored, the prevailing inflation rate is too low for comfort, Nagesh Kumar, member of the Reserve Bank of India’s (RBI's) Monetary Policy Committee (MPC), tells Manojit Saha in a telephonic interview.

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Edited excerpts:What was the main reason behind your voting for a repo rate cut in the December policy?

The RBI-MPC has also cut the repo rate by 100 basis points (bps) to support the growth momentum, effected over the past year in a phased manner. The transmission of these cuts to lending and deposit rates is by now nearly complete. Hence, we found a case for a fresh cut of 25 bps, as the economic activity had peaked in the second quarter of the current financial year. Fortunately, the inflationary situation has been very benign, providing policy space. Headline inflation stood at 0.3 per cent in October 2025, with projections for the full year 2025-26 at 2 per cent. Inflation expectations remain well anchored.

Do you think growth peaked in Q2 of FY26, and that the second half would witness much slower growth?