Mumbai, April 7
As the Reserve Bank of India (RBI) began its Monetary Policy Committee (MPC) meeting (from April 7-April 9) here, SBI Research on Monday said it expects a 25-basis point rate cut in the policy and cumulative rate cut over the cycle could be at least 100 basis points, with two successive rate cuts over February and April.
With an intervening gap in June, the second round of rate cuts could start from August, said the SBI report.
“During February 2025 to March 2026, we expect at least 100 bps cut in repo rate (25 bps already cut in February 2025 and another 75 bps rest of FY26), which will transmit exactly same to EBLR and 60 bps in MCLR,” the report mentioned.
The report further stated that based on the available estimates of natural rate the neutral nominal policy rates works out at 5.65 per cent.
“Factoring in the average inflation envisaged and the output gap consequent upon different GDP scenarios, a cumulative policy rate reduction of 75-100 bps is likely going forward,” it added.
The RBI MPC decision announcement is scheduled for release on April 9, which will provide key insights into the Reserve Bank’s policy stance and India’s economic outlook.