RBI Governor Sanjay Malhotra indicated the potential for a repo rate cut during the upcoming December monetary policy review, citing favorable macroeconomic indicators and declining inflation.
In an interview, he confirmed that the Monetary Policy Committee (MPC) had previously acknowledged the possibility of a rate cut, with recent data not diminishing this prospect.
He emphasized the RBI’s dual mandates of price stability and growth. The MPC has kept the repo rate unchanged in its last two meetings to control inflation.
The RBI has reduced its CPI inflation forecast for FY26 to 2.6% and upgraded its GDP forecast to 6.8%. Morgan Stanley anticipates a 25 basis points reduction to 5.25% at the December meeting, but notes that the RBI will likely proceed cautiously as it assesses domestic growth and inflation dynamics.
Source – sarkaritel.com
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