The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) began its three-day meeting on Monday in Mumbai to review economic conditions and decide on key policy rates. The committee will deliberate on the repo rate and other policy measures before announcing its decision on Wednesday, October 1.
RBI Governor Sanjay Malhotra is scheduled to unveil the outcome of the meeting at 10 AM on Wednesday. The announcement is closely watched by markets, businesses, and policymakers, as it impacts borrowing costs, lending rates, and overall economic activity.
In the previous policy meeting held in August, the MPC had unanimously kept the repo rate unchanged at 5.50 per cent. Ahead of the current meeting, a report by the State Bank of India (SBI) suggested that a 25-basis-point rate cut could be the most suitable option, given that inflation remains under control and the economic outlook indicates further moderation.
The SBI report noted that central bank communication is a crucial policy tool and highlighted the importance of careful messaging to avoid errors, adding that any rate cut would require calibrated communication. Inflation is expected to remain benign in FY27, with consumer price index (CPI) projections estimated at around 4 per cent or lower. With potential GST rationalization, the October CPI could drop to near 1.1 per cent, marking the lowest level since 2004.
The MPC meeting will focus on assessing the current state of the economy and determining whether adjustments in policy rates are needed to support growth while keeping inflation under check.
–ANI
