The bond markets may have been miffed as the Monetary Policy Committee (MPC) opted not to cut the policy rate on Wednesday and leave the stance unchanged at neutral, but the accompanying commentary was clearly dovish. It’s clear that Reserve Bank of India (RBI) Governor Sanjay Malhotra’s comments on easing inflation and favourable macro-conditions have opened up space for further supporting growth, with many suggesting there is room for at least one more repo rate cut. A second one would depend on the inflation trajectory which has been forecast at 2.6% for FY26 but 4.5% in the first quarter of FY27.

Growth vs. Tariffs: Why the moderate GDP forecast?

While the RBI’s GDP growth projection for the current fiscal has been raised by 30 basis points (bps) to 6.8% on the back of recovering

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