Will EMI relief be on the cards? Economists make bold predictions for the RBI MPC
According to the latest data, India's real GDP, after adjusting for inflation, is projected to grow by 8.2 percent in Q2 of FY 2025-26, compared to 5.6 percent in Q2 of FY 2024-25.
Upcoming RBI MPC Meet: Next week's monetary policy review meeting of the Reserve Bank of India (RBI) is taking place at a time when inflation is at an all-time low and growth is accelerating.
According to the latest data, India's real GDP, adjusted for inflation, is projected to grow by 8.2 percent in Q2 of FY 2025-26, compared to 5.6 percent in Q2 of FY 2024-25.
Furthermore, India's inflation rate moderated significantly in October, reflecting strong economic fundamentals and effective price management measures. Headline inflation, measured by the Consumer Price Index (CPI), fell to 0.25% compared to a year earlier.
Will there be any major changes?
According to economists, the RBI MPC will decide on the repo rate. Bank of Baroda Chief Economist Madan Sabnavis said, "Inflation is expected to remain above 4% in Q4-FY26 and FY27, which will keep the real repo rate at 1-1.5%.
The policy rate appears to be at a reasonable level. In these circumstances, we do not believe there should be any change in the policy rate."
RBI Governor Sanjay Malhotra said earlier this week that there was room for a repo rate cut to boost growth at the next Monetary Policy Review meeting in December due to positive macroeconomic indicators.
Malhotra had also said after the last Monetary Policy Committee meeting in October that there was room for further repo rate cuts due to low inflation, giving the RBI space to focus on growth.
He also said that the central bank has two tasks: maintaining price stability and fostering growth. Malhotra said, "We are neither aggressive nor defensive on growth."
The Monetary Policy Committee, headed by the RBI Governor, had kept the repo rate unchanged in the last two reviews in August and October to keep inflation under control. Prior to this, the RBI had reduced the repo rate by 100 basis points between February and June, from 6.5% to 5.5%.
What is Morgan Stanley's opinion?
Morgan Stanley expects the RBI to reduce the repo rate by 25 basis points to 5.25%. The report states that the broader policy stance is likely to remain accommodative, and that the central bank's decision on the action will be data-driven.