MPC meeting: RBI’s three day monetary policy discussions begin today – Another repo rate cut coming?
The RBI’s three-day monetary policy committee meeting opens in Mumbai on Wednesday, marking the start of the central bank’s latest policy review. Over the course of the discussions, members of the six-member panel is set to hold discussions on how the central bank should navigate policy, in accordance with the newest growth and inflation readings. The meeting will be conducted from December 3 to 5 and the results of the monetary discussions will be announced by RBI governor Sanjay Malhotra at 10 AM on Friday. The review is taking place during a phase in which the economy is showing considerable resilience while prices are cooling at an unprecedented pace.
Another rate cut? Here’s what experts say
As the Reserve Bank of India prepares to announce its decision this week, the latest economic data has presented a contrasting backdrop — rapid economic expansion on one hand, and historically low inflation on the other. India’s GDP expanded by 8.2% in the second quarter of FY26, a pace of growth that has encouraged expectations of stability in policy action. Economists say the momentum may have extended into the October–December period as well, supported by firm rural demand and improving urban consumption patterns. At the same time, inflation has fallen sharply. Consumer price inflation dropped to a series low of 0.25% in October, driven largely by a decline in food prices. Forecasts suggest this softness could persist and even settle below the Reserve Bank’s own earlier projections. Commenting on the conflicting economic signals, Mehul Pandya, MD and Group CEO of CareEdge Ratings, highlighted how they complicate rate decisions. “Both these developments (of a continued strong GDP growth and multi-year low inflationary levels) are mutually opposing forces from an interest rate perspective. Central banks usually do not tend to cut interest rates during the periods of strong economic activity, represented by GDP growth. At the same time, the central banks usually respond to a low inflationary environment by cutting interest rates,” ANI quoted Pandya as saying. Some industry voices believe the data now gives the central bank enough headroom to ease policy. Taking an optimistic view, Mayur Modi, Co-founder and Co-CEO of Moneyboxx Finance Limited, argued that robust growth has widened the RBI’s scope for action. He said, “With inflation easing to multi-year lows and remaining comfortably within the RBI’s tolerance band, the probability of a repo rate cut has strengthened meaningfully. Softening price pressures give the MPC more room to prioritise growth without risking macroeconomic stability.” Modi added that a well-timed reduction could help lift consumption cycles and stimulate credit demand across key segments. Despite growing speculation of a cut, an assessment by Bank of Baroda suggests that the central bank will keep the repo rate unchanged at 5.50% and maintain its neutral stance. The report pointed out that economic performance has continued to beat expectations, with urban spending and a resilient rural economy expected to sustain momentum into the third quarter. It also flagged signs of recovery in private investment, supported by a rise in credit demand.
