Economists Expect 25 bps Repo Cut This Week

The RBI is likely to cut key interest rates again in April monetary policy as inflation intensity continues to moderate

- BENN KOCHUVEEDAN @Mumbai

WITH the tariff war posing a new challenge to growth and not to inflation, the Reserve Bank-led monetary policy panel that begins the three-day meet here on Monday is likely to take more growth-inducing measures and not just deliver another 25 bps reduction in the repo rate, say Mint Road observers.

If it cuts the repo rate again on Wednesday this will be the second consecutive rate cut and will take the key policy rate to 6%. The first repo cut was delivered in the February meeting and came in after a gap of almost five years. And since then, the inflation print has been comforting and recorded a seven-month low of 3.6% in February and the same is projected to print in under 4% in March.

"We expect the MPC to reduce the repo rate by 25 bps this week, as inflation continues to moderate. We see CPI inflation averaging at 4.2% in FY26," Aditi Nayar, the chief economist at Icra Ratings told TNIE.