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RBI Governor Sanjay Malhotra provided a succinct explanation for the rate cut when he said, “Inflation at a benign 2.2 per cent and growth at 8.0 per cent in H1:2025-26 present a rare Goldilocks period.” That Goldilocks period is likely to get even better in the second half of the fiscal year, with the Monetary Policy Committee (MPC) pegging average retail inflation at 1.75 percent, although growth is expected to slow to a more modest but still strong 6.75 percent in H2.

At its October policy meeting, average growth in the second half of FY26 was projected at 6.3 percent and average inflation at 2.9 percent. That means the forecast for GDP growth has been revised upwards. Why then cut rates? Well, simply because the inflation forecast too has come down, so why not seize th

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