RBI Monetary Policy Committee (MPC) meeting starts on Wednesday. The meeting conducts under leadership of newly appointed Governor Sanjay Malhotra. It is first RBI Policy meeting conducts under Sanjay Malhotra. The question Is RBI Cut Interest rates of 25 bps in nearly five years?
Analysts are asking questions on whether RBI will cut interest rates in nearly 5 years or not. They ask, is he maintains the current rate to manage currency stability and inflation rate? The decision of meeting will announce on 7 Feb, 2025.
RBI MPC Meeting: Will RBI Cut Interest rates of 25 bps in nearly five years
As per experts, Sanjay Malhotra may reduce the repo rate by 25 bps to support economic growth. It is because of new Union Budget 2025 focus on increasing demand.
Since Feb 2023, the repo rate has been unchanged at 6.5%, and the last rate cut was released during COVID-19 in May 2020. Chief Economist at Bank of Baroda, Madan Sabnavis, believe that rate cuts are crucial as per current economic conditions.
While some expect to cut the repo rate by RBI, whereas others believe that RBI will wait for global economic conditions to stabilise it before make any rate changes.
RBI Policy Shift Amid Economic Conditions
As per Edelweiss Mutual Fund predictions on RBI Cut Interest rates of 25 bps in nearly five years, it is expected that 50 bps rate cut will announce in 2025, to support economic growth. One of Economist at Deloitte, Rumki Majumdar also believe that RBI take this decision to cut rates. “Even there is pressure on RBI to cut rates, but RBI can also choose to keep rates unchanged, and maintain easy policy,” she said.
CIO at SAMCO Mutual Fund, Umesh Kumar Mehta also make a statement and said, “Bond yields in the US are increase because of inflation rates, and put pressure on RBI.”
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