Perspective on RBI MPC by Ms. Rajani Sinha, CareEdge Ratings
Below the Perspective on RBI MPC by Ms. Rajani Sinha, CareEdge Ratings
“ The RBI MPC’s decision to slash the policy repo rate by 25 basis points, while maintaining the policy stance at ‘neutral’ is in line with our expectations. RBI chose to utilise the window of opportunity provided by very low inflation to provide impetus to growth. Moreover, the liquidity injecting measures announced should ensure smooth transition of policy rate cuts done so far.
While the growth data has been strong so far, there is no denying that heightened global uncertainty is likely to continue next year. GDP growth is likely to moderate in the coming quarters as goods exports feel the pinch of higher US tariffs and low base effect wears off. However, we expect GDP growth to still be healthy at 7.5% in FY26 and around 7% in FY27. With average inflation at around 4% in FY27, real rate of interest would be in the neutral zone at around 1.25%, implying no need for further rate cuts in 2026.”
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