India’s central bank, the Reserve Bank of India (RBI), kicks off its key Monetary Policy Committee (MPC) meeting today in Mumbai. The three-day session focuses on deciding whether to tweak policy rates amid the current economic landscape.
MPC members will dive into discussions on the repo rate—the interest rate at which RBI lends to banks—and review factors like growth and inflation. Their goal? Balance economic expansion with keeping prices stable.
The meeting runs through Tuesday, with RBI Governor Sanjay Malhotra set to reveal the decisions on Wednesday, October 1, at 10 a.m. This announcement will shed light on any changes to the repo rate and other measures, and markets, businesses, and experts watch closely since it affects borrowing costs and overall activity.
In August’s meeting, the MPC unanimously held the repo rate steady at 5.5 percent. Now, eyes are on whether they’ll cut it this time.
A fresh report from the State Bank of India (SBI) suggests the MPC could opt for a 25 basis points (0.25 percent) reduction. SBI argues it’s the smart move right now, given controlled inflation and signs of further cooling.
The report points out that central banks communicate carefully in uncertain times, and skipping a cut now could miss the mark. Post-June data has raised the bar for rate cuts, but RBI’s messaging will be key.
Inflation looks set to stay mild, even into fiscal year 2027. Without tweaks to the Goods and Services Tax (GST), it’s already dipping below 2 percent in September and October. Overall Consumer Price Index (CPI) inflation for FY27 could hover around 4 percent or lower. If GST changes kick in, October’s CPI might drop to 1.1 percent—the lowest since 2004.
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