SBI bats for another rate cut

The SBI study stated that there is merit and rationale for the RBI to reduce the key benchmark lending rate by 25 basis points in the forthcoming monetary policy, as retail inflation is expected to remain benign even in the next financial year.

- PRESS TRUST OF INDIA

A SBI research report has pitched for a 25 bps rate cut, saying it is the ‘best possible option’ for the RBI, though some other experts opined that the central bank's rate-setting panel may again opt for status quo in its bimonthly policy to be announced October 1.

Reserve Bank of India (RBI) Governor Sanjay Malhotra-headed Monetary Policy Committee (MPC) is scheduled to begin a three-day brainstorming on policy rate Monday in the backdrop of the ongoing geopolitical tensions and the US imposing 50 per cent tariffs on Indian shipments.

The decision will be announced October 1 (Wednesday).

The RBI reduced the key short-term lending rate (repo) by 100 basis points in three tranches beginning in February, amidst declining consumer price index (CPI) based inflation.

However, the central bank opted for a status quo in the August bimonthly monetary policy, taking a wait-and-watch approach to assess the impact of US tariffs and other geopolitical developments on the domestic economy.