Mumbai (Maharashtra) [India]: The Reserve Bank of India’s Monetary Policy Committee (MPC) is poised to announce its decision on policy interest rates on Wednesday, with RBI Governor Sanjay Malhotra scheduled to present the Monetary Policy Statement at 10:00 AM, followed by a press conference at 12:00 PM.
Amid rising global economic uncertainty and inflationary concerns, there is a growing divide among economists on the direction and magnitude of the central bank’s move.
Some experts are pushing for a 50 basis points (bps) cut to stimulate economic growth, while others advocate for a more measured 25 bps cut, citing inflation risks and external vulnerabilities.
In an exclusive conversation with ANI, Debopam Chaudhuri, Chief Economist at Piramal Group, supported an aggressive rate cut approach:
“RBI should consider front-loading rate cuts, and a 50-basis-point cut in April can be a good pre-emptive move. Domestic inflation is low, globally, yields are coming down, and USDINR has regained some of its lost ground. These trends present a good opportunity for aggressive rate cuts.”
Chaudhuri argued that with inflation under control and a strengthening rupee, the central bank has room to act decisively to support domestic growth.
In contrast, Sonal Badhan, Economics Specialist at Bank of Baroda, favored a more cautious 25 bps cut, noting uncertainties around the monsoon season and other macroeconomic variables.
“We are going with a 25 basis points rate cut, as RBI will remain cautious until the situation of monsoon is more clear. However, the stance will be changed to accommodative, implying that after this, there is scope for more than one 25 basis points rate cut, depending upon the prevailing macro-economic situation,”
she told ANI.
Globally, central banks are grappling with the challenge of balancing growth and inflation, a task made harder by recent protectionist moves, including tariff hikes by U.S. President Donald Trump. These geopolitical developments have added pressure on emerging market economies and complicated monetary policymaking.
The RBI last cut its policy repo rate on February 7, slashing it by 25 basis points from 6.5% to 6.25%, marking the beginning of the current easing cycle.
Markets, businesses, and policymakers are closely monitoring Wednesday’s outcome, which will shape the outlook for borrowing costs, liquidity, and credit conditions in the months ahead.