Mumbai: The Reserve Bank of India’s monetary policy committee (MPC), led by Governor Sanjay Malhotra, will announce its interest rate decision on October 1, and it’s shaping up to be a tough call. While most economists expect the repo rate to stay unchanged at 5.5 percent, a significant number still believe a 0.25 percent rate cut is possible, especially given India’s weakening growth due to rising U.S. tariffs.

Why the Pressure to Cut Rates?

Inflation in India is well within the RBI’s comfort zone of 2 percent to 6 percent. In fact, recent tax cuts and a good monsoon have helped keep prices low. August inflation was just 2.07 percent, and for the year, it could average around 2.7 percent. These numbers give the RBI some space to reduce borrowing costs to support growth. Read Also In

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