RBI MPC meeting: Will Governor Sanjay Malhotra announce rate cuts in his first policy review? 

RBI monetary policy meeting announcements: The Reserve Bank of India is widely expected to cut interest rates today for the first time in nearly five years. Governor Sanjay Malhotra, who succeeded former RBI Governor Shaktikanta Das, is expected to cut interest rates in his first monetary policy review, bringing the repo rate to 6.25 per cent. 

Experts believe that a 25 basis points cut in repo rate is likely citing the government’s growth-focused policies and easing inflation concerns. 

Chief Economist at Bank of Baroda Madan Sabnavis believes that the macroeconomic conditions are ripe for a rate cut. Considering the growth stimulus announced in the Budget 2025, conditions appear to support a rate cut, he said. “The only concern now could be trade war outcomes as the rupee under pressure again,” he said. 

Edelweiss Mutual Fund noted that a 25-bps rate cut in February MPC is expected as monetary policy will have a lot of heavy lifting to do to support economic growth.

Murthy Nagarajan, Head-Fixed Income at Tata Asset Management also expects a 25 basis points rate cut in today’s monetary policy announcements. 

Additionally, a Reuters poll also showed that most experts – 70 per cent – expect a rate cut of 25 basis points. Shilan Shah, deputy chief emerging markets economist at Capital Economics told the news agency, "With the finance ministry still keeping the overall fiscal deficit in check, there is scope for the RBI to do more to boost the economy. This strengthens our conviction that the Bank – under new leadership - will begin easing monetary policy at the conclusion of its MPC meeting on Friday." 

"We are expecting a 25-basis points cut with less likelihood of RBI changing stance as it is incumbent for the central bank to remain watchful of inflationary pressures emanating out of external and internal factors," economists at STCI Primary Dealership said in a note.

However, some experts are not convinced of an imminent rate cut. Rumki Majumdar, Economist and Director at Deloitte, believes the RBI will adopt a cautious stance. “Given the balancing act of managing inflation and boosting credit growth, it will be a difficult call. The RBI is under pressure to cut policy rates. But we believe the RBI will likely maintain status quo in terms of policy rates and maintain easy stance,” she noted.

Umeshkumar Mehta, CIO, SAMCO Mutual Fund stated that MPC is likely to maintain the current interest rates rather than implement a rate cut at this time to keep currency stable.