By Admin 
The three -day important meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has started from 4 June. Meanwhile, the global brokerage firm Nomura has introduced a major estimate, in 2025 the RBI repo rate can cut 100 basis points (BPS). This estimate is twice the general opinion of the market, which was assuming a cut of just 50 BPS.
Meeting under the leadership of RBI Governor
The meeting is being held under the chairmanship of RBI Governor Sanjay Malhotra and its decision will come on 6 June. This time everyone’s eyes are on whether RBI will cut the repo rate for the third consecutive time. The special thing is that at present, the inflation rate remains below the target level of 4 per cent, which strengthens the possibilities of cutting interest rates.
Cut twice so far
In the last two meetings, RBI has reduced the repo rate by 6 percent by cutting a total of 50 BPS. Nomura says that RBI can get a chance to further cut due to the recession and inflation in the economy being below the target level.
According to Nomura, GDP growth FY26 is expected to be 6.2 per cent (RBI is estimated at 6.5 per cent). Inflation is estimated to be 3.3 percent (target is 4 percent). In this sense, there is a need to bring policy rates to “neutral”, but to “encouragement zone”.
Estimates of 25bps cut every quarter
Nomura believes that RBI can cut 25bps in the remaining four monitoring policy reviews (June, August, October and December) of the year. In this way the repo rate can come up to 5.00 percent. Apart from this, adequate liquidity will remain in the banking system, around 1 percent of NDTL, which will see the effect of interest rates quickly.
RBI will not be affected by America’s decisions
RBI has already made it clear that its monetary policy decisions are based on domestic economic conditions, not the policies of countries like America. Nomura also believes that even though the US Federal Reserve does not change its rates Q4, RBI will run on its way, because India’s situation is different. At the same time, India’s current account deficit (CAD) is estimated to be around 0.6 percent in FY26, due to which there is no major challenge about funding. Although GDP growth in Q1 2025 was 7.4 percent, according to the report, the pace of personal consumption and capital expenditure was slow.
There is weakness in urban consumption
Credit growth and real income growth is also slow. Whereas, global uncertainty, the glut of Chinese goods and the lethargy of private investment are also a matter of concern. Nevertheless, low inflation, decline in commodity prices and strengthening of services may balance India’s growth.
CPI may come below 3 percent
From January to April, CPI inflation has been 3.6 percent on an average. Nomura says that it can go below 3.0 percent in the next six months. In addition, the prices of food items have decreased. Core inflation is also controlled. There is also softening in increment and input cost. In FY26, CPI can be 3.3 per cent on an average, which is much lower than the estimate of 4 per cent of both RBI and the market.
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