RBI May Ease Policy Further If GDP Growth Slows: Report

The Reserve Bank of India's Monetary Policy Committee (MPC) could consider reducing policy rates further if upcoming GDP data comes in lower than expectations and the US Federal Reserve begins aggressive rate cuts due to a weaker labour market, according to a report by HSBC Mutual Fund.

- TBG NETWORK

For FY26, the RBI-MPC, in its latest policy meeting has kept the GDP growth projection at 6.5 per cent. Quarterly GDP growth is projected at 6.5 per cent in Q1, 6.7 per cent in Q2, 6.6 per cent in Q3, and 6.3 per cent in Q4. The central bank had also decided to leave the repo rate unchanged at 5.50 per cent and maintained its neutral stance. The decision comes after frontloaded cuts of 100 basis points in earlier policies. The MPC highlighted that it opted for a pause in view of the recent rate reductions, while also recognizing that global uncertainties and tariffs pose risks to growth. However, it downplayed the likely impact of these risks on inflation. The report stated "Any possible room for further easing may open up if GDP prints come lower than expecta