The Monetary Policy Committee of the Reserve Bank of India will announce its decision on policy rates today

Mumbai: On Wednesday, the Monetary Policy Committee (MPC) of the Reserve Bank of India is scheduled to make its policy rate announcement. At 10:00 AM, RBI Governor Sanjay Malhotra will deliver the Monetary Policy Statement. At 12:00 PM, the governor will respond to questions from the media and provide an explanation of the committee’s reasoning at a post-policy news conference.

Economists disagree greatly on what the RBI should decide. A more cautious approach is anticipated, according to some analysts, while others are calling for a 50 basis point (bps) reduction in the policy rate to boost economic development. The other anticipates a lesser decrease of 25 basis points, citing worries about inflation, which remains a major obstacle for the central bank.

Economists tell ANI in an exclusive interview that the central bank has a fair chance to lower interest rates given the current domestic and international circumstances.

The RBI should think about front-loading rate reduction to boost the Indian economy, according to Debopam Chaudhuri, Chief Economist of Piramal Group.

A 50 basis point decrease in April might be a decent preemptive measure, he said, adding that the RBI could think about front-loading rate cuts. Globally, rates are down, domestic inflation is modest, and the USDINR has somewhat recovered its lost territory. There is a significant chance for substantial rate decreases given these tendencies.

According to Chaudhuri, the RBI can afford to take a risky stance at this policy meeting to promote growth since inflation is presently under control and the rupee has begun to appreciate once again.

On the degree of rate reduction, however, different specialists have differing opinions.

Bank of Baroda Economics Specialist Sonal Badhan concurs that the RBI would adopt a more growth-friendly posture but anticipates a modest decrease of 25 basis points.

Since the RBI will continue to exercise caution until the monsoon situation is more evident, we are going with a 25 basis point rate drop. But after this, the policy will shift to an accommodating one, meaning that, depending on the macroeconomic climate at the time, there may be more than one 25 basis point rate decrease,” she said.

In the face of growing uncertainty, central banks throughout the world are finding it difficult to preserve economic stability. The latest tariff measures made by US President Donald Trump are one of the main causes of anxiety. The global economy is now under more strain as a result of these protectionist policies, which makes it more difficult for central banks to balance promoting growth with containing inflation.

The MPC unanimously agreed to lower the policy repo rate by 25 basis points, from 6.5 cent to 6.25 per cent, in its most recent monetary policy statement on February 7. In the current easing cycle, this was the first rate reduction.

Since the decision would determine the direction of borrowing rates and liquidity in the economy in the next months, market players, companies, and policymakers are keeping a careful eye on it.