RBI's MPC is widely expected to hold repo rate at 5.5% on Dec 5, maintaining neutral stance despite record-low CPI at 0.25% in Oct. Forecasts point to downward inflation revision from 2.6%, balancing robust 8.2% Q2 GDP and rupee pressures.
The three-day MPC meet (Dec 3-5) wraps Friday with Governor Sanjay Malhotra's announcement at 10 AM, amid split views: YES Bank, BoB predict pause for stability, while Reuters poll, Crisil favor 25 bps cut to 5.25%. Ultra-low inflation (below 2% band) from food plunge offers room, but strong growth, rupee at 90+/USD, and US rate gaps urge caution.
Key Highlights
-
Rate Consensus: Hold at 5.5% (since Aug post-100 bps cuts); neutral stance retained.
-
Inflation Trim: FY26 forecast down to ~1.8-2% from 2.6%; Oct CPI 0.25% (decade low).
-
Growth Strength: Q2 GDP 8.2%; urban/rural demand resilient despite PMI/IIP softening.
-
Risks Ahead: Rupee weakness, festive fade, capex slowdown; Fed cut odds influence.
Sources: Reuters (RTRS), Tribune India, Economic Times, ANI