The Reserve Bank of India’s Monetary Policy Committee will announce its key decisions today at 10 am, after the 3-day meeting that started on December 3.
The fifth RBI meeting of FY26 is crucial as it comes at a time when the rupee hit a lifetime low this week, breaching the 90/$ mark. Inflation in October fell to its lowest level in the current series and the Q2 GDP growth jumped to a 6-quarter high abover 8%, way above estimates.
Analysts say the MPC has “a tough task at hand” as it decides whether to prioritise growth or inflation. The market remains divided on expectations. According to a poll conducted by Financial Express 8 out of the 15 economists polled expecting no rate cut and the other seven anticipating a 25 basis points (bps) reduction.
RBI may lift FY26 growth outlook to 7%: JM Financial
JM Financial expects the RBI to raise its FY26 growth forecast by at least 20 basis points to 7%, while lowering its inflation projection by 40 basis points to 2.2%. “The RBI’s main objective is to support growth while maintaining price stability,” said JM Financial.
The analyst also mentioned that the currency’s recent fall is unlikely to influence the MPC’s decision.
BNP Paribas expects no rate cut
BNP Paribas does not expect the RBI to cut rates unlike what is widely expected. The analyst says even though inflation remains low, but factors such as the weak rupee, external account uncertainties and a steady GDP outlook may push the MPC to stay cautious.