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RBI Repo Rate Cut: The Reserve Bank of India (RBI) is scheduled to hold the next meeting of the Monetary Policy Committee (MPC) from 29 September to 1 October, on which the entire country is eyeing. The Reserve Bank has cut the repo rate by 100 basis points from February to June. After this, there has been no change in interest rates in the meeting which lasted from August 4 to 6. Now the whole focus is on the next meeting.
Does the repo rate expect to decrease?
Nomura analysts hopes that the RBI will reduce the repo rate by cutting the repo rate by cutting the repo rate by decreasing the negative impact of inflation and US tariffs to make it 5.25 percent. Nomura says that inflation remains significantly below 4 percent, which is getting scope to relax policy and support domestic demand amidst the external risks of RBI. The GST deduction implemented from 22 September has promoted conjunctions during the festive season in many sectors such as small cars, home appliances and e-commerce.
Trump’s tariff pressure
In contrast, 50 percent of American tariffs are pressurizing exporters, especially small companies on effective Indian exports from 27 August. The August trade figures have already seen a decrease in export to America. Nomura has warned that if the trade tension continues, India may have to face a recession in job reduction, closure of factories and investment, which is likely to appear in the second half of FY 2026.
30 percent possibility of not changing the rate
Global brokerage company Nomura has expressed 70 percent possibility of cutting a 25 basis points in the repo rate in October and has expressed 30 percent possibility of no change in the rate by the RBI. Nomura says that the MPC may wait until December to assess the entire impact of changes in American tariffs and GST before taking any further steps. Nomura emphasized the need for multidimensional policy response to support expoters, regulatory reforms, monetary policy and by mixing fiscal deficit targets to maintain the pace of development in the country and combat external risks.
