Summary:

The Reserve Bank of India (RBI) is expected to cut the repo rate by 25 basis points (bps) in April, as part of a 75 bps reduction anticipated in FY26, according to India Ratings and Research (Ind-Ra). Headline inflation in FY25 is projected to cool to 4.7%, with potential for further easing if US tariffs impact growth. The repo rate, raised to 6.5% by February 2023, was cut to 6.25% in February 2025.

Ind-Ra expects up to three rate cuts in FY26, totaling 75 bps, reducing the repo rate to 5.5% with average inflation at 4%, yielding a real repo rate of 1.5%. The RBI, while prioritizing inflation control, is likely to focus more on supporting slowing growth momentum.

Source: IBEF

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