Published 15:26 IST, February 5th 2025
RBI's MPC Meeting Begins Today: Will New Governor Sanjay Malhotra Cut Rates?
According to experts, economic conditions are ripe for a rate cut, citing the budget's growth stimulus and expectations of easing inflation.

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting starts today under the leadership of newly appointed Governor Sanjay Malhotra. This marks his first policy meeting since taking office, and analysts are divided on whether the RBI will cut the repo rate for the first time in nearly two years.
The repo rate has remained at 6.5 percent since February 2023, with the last rate cut occurring in May 2020 during the COVID-19 pandemic. Some analysts believe that a 25 basis point (bps) cut could be on the cards to support economic growth, particularly after the Union Budget 2025 emphasised boosting demand.
“ This time I feel the central bank will go for injecting more liquidity and the MPC members will be divided as far as rut cut is concerned,” says Keki Mistry, the Indian financial sector veteran and on the board of leading institutions like the HDFC Bank.
According to experts, economic conditions are ripe for a rate cut, citing the budget's growth stimulus and expectations of easing inflation. However, he pointed out that the rupee remains under pressure due to global trade uncertainties.
While many foresee a potential rate reduction, others suggest that the RBI may stabilize global economic conditions before making any adjustments.
Several factors will play a key role in the RBI's decision-making process:
Inflation trends: While inflation remains above 5%, a downward trend could pave the way for a rate cut.
Currency stability: The rupee has been facing challenges due to rising US bond yields and global trade tensions.
Economic growth: Given the government's focus on expanding the economy, a rate cut may help boost demand.
Global uncertainties: Trade wars and fluctuations in commodity prices could influence the RBI’s approach.
The stock and bond markets are closely watching the MPC’s decision. If the RBI cuts rates, banking stocks could see gains, and borrowing costs for businesses and consumers may decrease. However, if the rates remain unchanged, markets may experience volatility as investors adjust their expectations.
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Updated 15:26 IST, February 5th 2025