RBI Will Deliver a Final 25 BPS Rate Cut in December: HSBC Global Research
RBI Likely to Cut Repo Rate by 25 BPS in December: Report
New Delhi: The Reserve Bank of India (RBI) is projected to reduce the repo rate by 25 basis points (BPS) during the December Monetary Policy Committee (MPC) meeting, according to a recent analysis. This potential cut would bring the repo rate down to 5.25 percent by the close of 2025.
Anticipated Pause Before the Cut
Given the recent moderation in inflation, the RBI is expected to maintain the current repo rate in its upcoming two MPC meetings. This suggests a strategic pause before further easing monetary policy.
The Rationale Behind the Projection
The report suggests that the RBI will likely hold steady during the August and October meetings. However, the prediction is that a final 25 BPS rate cut will be implemented in December, moving the repo rate towards 5.25% by the end of the following year.
Potential Impact on the Economy
A reduction in the repo rate typically aims to stimulate economic growth by making borrowing more affordable for businesses and consumers. This could lead to increased investment and spending, potentially boosting various sectors of the Indian economy.
- Increased borrowing for businesses and consumers
- Boost to housing and auto loans
- Potential downward pressure on deposit rates
- Report predicts a 25 BPS repo rate cut by RBI in December.
- RBI is expected to pause rate cuts in August and October meetings.
- The final repo rate after the December cut is projected to be 5.25%.
- The predicted rate cut is aimed at stimulating economic growth through cheaper borrowing.
- Moderating inflation is a key factor influencing RBI’s potential action.
- The forecast suggests a cautiously optimistic outlook on the Indian economy.
- Changes in repo rates directly affect the cost of loans for individuals and businesses