Mumbai (Maharashtra) [India]: The Reserve Bank of India (RBI) kicked off its three-day Monetary Policy Committee (MPC) meeting today, April 7, with a decision on policy rates expected on April 9 at 10 AM. The meeting, chaired by RBI Governor Sanjay Malhotra, is set against a backdrop of moderating inflation, stable currency trends, and growing concerns over economic slowdown.
In its previous meeting on February 7, the MPC reduced the repo rate by 25 basis points (bps)—from 6.5% to 6.25%—marking the beginning of a new rate easing cycle.
April Rate Cut Likely, Say Experts
According to a report from the State Bank of India (SBI), the RBI is expected to deliver another 25 bps rate cut in the current meeting, continuing its cautious easing path. The report projects a cumulative rate cut of at least 100 bps through the current cycle.
“We expect a 25-basis point rate cut in April’25 policy. The cumulative rate cut over the cycle could be at least 100 basis points,” the SBI report stated.
The report also flagged concerns over bank deposit mobilization, warning that low returns for savers amid falling interest rates and the shift toward Just-In-Time (JIT) capital deployment may create pressure on banks.
Diverging Views on Quantum of Rate Cut
While some economists advocate for a bolder move, others predict a more gradual easing approach.
Debopam Chaudhuri, Chief Economist at Piramal Group, is calling for a 50 bps rate cut, citing high borrowing costs and slow credit growth as barriers to economic momentum in FY25.
“A 50 bps rate cut seems to be the need of the hour. At a time when all three major data trends—softer inflation, manageable bank liquidity deficit, and a stable INR—support a rate cut, the MPC may move fast,” said Chaudhuri.
On the other hand, Sonal Badhan, Economics Specialist at Bank of Baroda, forecasts a 25 bps reduction in April, expecting a total of 75 bps in cuts over the cycle.
“RBI is expected to take a more gradual approach in lowering rates, hence a 25bps cut is more likely,” Badhan said.
She added that capital inflows will likely improve in the coming months, driven by India’s strong domestic growth, even as geopolitical and global trade uncertainties continue to loom.
All Eyes on April 9
The outcome of this MPC meeting will be closely watched by markets, businesses, and policymakers alike, as the RBI attempts to balance growth support with financial stability. If expectations hold, the central bank could continue its calibrated path toward lower interest rates, giving a much-needed boost to the Indian economy.