New Delhi [India]: As global financial markets continue to experience turbulence, top economists have called on the Reserve Bank of India (RBI) to take bold steps in its upcoming monetary policy meeting, with several advocating for interest rate cuts to support India’s economic growth.
The Monetary Policy Committee (MPC) began its deliberations on Monday in Mumbai, with the announcement on policy rates scheduled for April 9. Market observers and economists are closely watching for signs of a shift in the RBI’s stance.
Economists Divided on Quantum of Rate Cut
In an exclusive interaction with ANI, Debopam Chaudhuri, Chief Economist at Piramal Group, said current economic conditions present a “strategic opportunity” for the RBI to act pre-emptively.
“RBI should consider front-loading rate cuts, and a 50-basis-point cut in April can be a good pre-emptive move,” Chaudhuri stated.
“Domestic inflation is low, global yields are softening, and the rupee (USDINR) has regained strength. These trends justify a more aggressive easing approach,” he added.
Meanwhile, Sonal Badhan, Economics Specialist at Bank of Baroda, expects a smaller 25 basis points cut, noting that the central bank may tread cautiously until monsoon forecasts become clearer.
“We are expecting a 25 bps cut, with the RBI likely to shift its policy stance to ‘accommodative’—signaling room for further rate cuts depending on macroeconomic developments,” Badhan said.
Global Concerns Add Pressure on Central Banks
The call for rate cuts comes amid global economic uncertainty, compounded by recent tariff announcements by U.S. President Donald Trump. These protectionist policies are triggering fresh concerns about trade disruption, pushing global central banks to adopt more dovish or flexible policies.
With inflation currently within RBI’s comfort zone, economists argue that the central bank has more headroom to stimulate growth and support domestic demand, especially as India eyes a stronger recovery trajectory.
Policy Outlook
The RBI last changed the repo rate in February 2023, and since then has maintained a cautious approach amid inflation concerns and volatile global trends. The upcoming decision on April 9 is expected to signal the central bank’s future path—whether it continues to hold steady or pivots toward rate easing.
Market stakeholders, investors, and policymakers await the announcement, which is likely to have ripple effects across financial markets, bond yields, and consumer lending rates.