RBI starts interest rate deliberations amid expectations of 25-bps cut

Days after the Union Budget, the Reserve Bank of India (RBI) on Wednesday started deliberations on the monetary policy amid expectations of a 25 basis-points rate cut, which will be the first in five years, as inflation remains within central bank's comfort zone, though the sliding rupee continues to be a concern.

The Reserve Bank had last reduced the repo rate by 40 basis points to 4 per cent in May 2020 to help the economy tide over the crisis following the outbreak of the Covid pandemic and subsequent lockdown. But in May 2022 the central bank started a rate hike cycle in view of the Russia-Ukraine war and paused it only in May 2023.

Newly appointed Reserve Bank Governor Sanjay Malhotra will be chairing his first Monetary Policy Committee (MPC) meeting starting Wednesday. The decision of the six-member panel will be announced on Friday (February 7).