# RBI MPC Meeting: Rate Cut or Pause?

All eyes are on RBI Governor Sanjay Malhotra, who will announce the MPC decision at 10 AM.

The policy comes at a crucial moment — inflation is cooling, growth remains strong, the rupee has slipped past 90, and global geopolitical risks are high. At the same time, India’s current account deficit is widening, while capital inflows—both FDI and FPI—remain weak, adding pressure on policymakers.

Why Markets Expect a Rate Cut

Bulls are hoping for a 25 bps rate cut, bringing the repo rate down to 5.25%, especially since inflation is projected to stay well below target.

a) GDP grew 8.2% in the September quarter.

b) CPI inflation hit a record low of 0.25% in October 2025 —
9 straight months below the RBI’s 4% target, and
3 consecutive months below the 2% lower tolerance band.

These trends strengthen the case for further easing.

What the Street Expects:

1) Economists also suspect the RBI may:

2) Upgrade GDP forecasts, and

3) Lower inflation estimates for FY2025–26.

Meanwhile, commentary on the Indian Rupee—especially after it breached 90 per USD—will be watched closely.

Bottom-line: A rate cut could be the inflection point bulls are praying for — the spark that may revive sentiment and bring the rally back on track.

(Source: Pradyut Patnaik, SEBI Registration No.: INH000001238, liveMint, Moneycontrol, business Standard)

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