Mumbai, January 10, 2025 – The Reserve Bank of India (RBI) is expected to implement a modest interest rate cut during its upcoming Monetary Policy Committee (MPC) meeting in February 2025. This decision comes amid expectations of easing inflation and concerns about a potential slowdown in economic growth. A Reuters poll suggests that consumer price inflation in India likely dropped to 5.3% in December 2024, down from 5.48% in November, largely driven by moderating food prices.
Economists predict a 25 basis point reduction in the policy repo rate, bringing it to 6.25%. This move is intended to stimulate economic activity in the face of growth deceleration. However, the RBI faces the difficult task of balancing inflation control with the need to support growth, especially given global economic uncertainties and domestic inflationary pressures. The central bank’s decision will be closely observed for its impact on India’s economic outlook.
