“RBI Governor Sanjay Malhotra’s First Move: Repo Rate Cut by 25bps to 6.25%, MPC Stays Neutral; Inflation Set to Ease to 4.2% in FY24”
On Friday, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced a 25 basis point reduction in the policy repo rate, bringing it down to 6.25%, following a unanimous decision by the Monetary Policy Committee (MPC). The RBI maintained its neutral stance, keeping the SDF rate at 6% and the bank rate at 6.5%. Malhotra emphasized the effectiveness of India’s flexible inflation targeting framework and highlighted the need for financial stability to support the economy. The RBI also projected inflation to moderate to 4.2% in the upcoming financial year, driven by favorable factors like strong crop yields and falling vegetable prices.
“RBI’s Inflation and Growth Projections for FY26: CPI Inflation Expected at 4.8% for Current Year, GDP Growth Forecast at 6.7%”
As the current financial year nears its end in March, the Reserve Bank of India (RBI) has projected a Consumer Price Index (CPI) inflation of 4.8%, assuming a normal monsoon. Under the leadership of Governor Sanjay Malhotra, the MPC anticipates inflation to ease to 4.5% in Q1 of FY25-26, 4% in Q2, 3.8% in Q3, and 4.2% in Q4. In terms of economic growth, the RBI forecasts real GDP to grow at 6.7% in FY26, with slight adjustments to Q1 and Q2 projections—lowering the former to 6.7% from 6.9%, and the latter to 7% from 7.3%. Growth estimates for Q3 and Q4 FY26 remain steady at 6.5%.
For a deeper analysis of the RBI’s decisions and their economic impact, join top economists DK Joshi (CRISIL), Sunil Sinha, and Garima Kapoor (Elara Capital) in a conversation with Siddharth Zarabi, Editor of Business Today.
