RBI -Repo Rate Slaughter: Experts see up to 75 BPS deduction in 2025. Would it be enough to counter Trump's rates? | Einsmark news

The Reserve Bank of India (RBI) delivered a widespread 25 basis points in the repo rate on April 9-the second consecutive relief of the central bank in 2025-which dropped the most important lending rate to 6 percent. The six-member Monetary Policy Committee (MPC) unanimously voted in favor of the reduction, while also moving his attitude of ‘neutral’ to ‘accommodating’, indicating a prejudice in the upcoming policy cycles. This move follows the similar rate reduction of February, which is a definite turnaround in the RBI policy direction amid mitigation of inflation and raising global economic wind winds. The central bank has also reduced its inflation forecast for FY26 to 4 percent (from 4.2 percent earlier) and GDP growth projection to 6.5 percent, citing growing risks due to geopolitical tension, trade friction and potential tariff scales by world powers, including the US. Analysts see room for more cuts to the Reserve Bank of India’s recent 25 -point -Repo rate cut and a shift in attitude, believe economists will probably continue to alleviate the rates throughout the year. In the midst of soft inflation and growing global economic uncertainties, the consensus is building that monetary policy may have to play a more active counter-cyclical role as India navigates a challenging external environment. Madhavi Arora, chief economist at Emkay Global Financial Services, said the latest RBI policy action indicates a clear relief of prejudice, especially in light of increased global volatility. “The MPC deliberately chose not to load its movements, but to preserve the main space to respond to potentially aggravating global financial circumstances. A June rate cut from another 25 BPS appears to be, with a further reduction of 25-50 BPS on the table, depending on the extent of the worldwide slowdown,” she said. Arora also suggested that the RBI could use non-conventional relief tools, including relaxed lending forms and lower daily CRR requirements, to support the liquidity as the global trade war further escalates. According to Rajani Sinha, Chief Economist at Careedge Ratings, the 25 BPS cut is well expected, but the revised growth prospects and accommodative attitude indicate the RBI intention to support a sampling economy. “We estimate a direct impact of 0.2-0.3 percent of GDP of retaliation rates, with additional indirect pressure of global uncertainties,” she noted. While the RBI expects FY26 GDP to grow at 6.5 percent, CareEDE sees it closer to 6.2 percent. Sinha predicted a further reduction of 50 bps in the Repo rate in FY26, who warned that a deeper cut would be needed if trade tensions were escalating dramatically. Long-term prospects remain positive Divam Sharma, CEO and co-founder of Green Portfolio, has acknowledged that the RBI policy was broadly in line with expectation and was in line with a guard-and-watch approach. “With falling interest rates, cheaper imports and new trade agreements in sight, the medium to long -term prospects for India remains strong,” he said. Although the short-term volatility may continue, subdued inflation offers the central bank space for another or two cuts this year. Sharma pointed to strong domestic consumption and rising export opportunities as key wind. The space for 75-100 BPS in FY26 reflecting a similar sentiment, said Manoranjan Sharma, chief economist at Infomerics valuation and ratings, said the back-to-back cut of 25 BPS in February and April is driven by the need to promote economic growth in the midst of dampen inflation. “It will provide much -needed relief to lenders on interest rate -sensitive sectors,” he said, adding that the accommodating shift indicates strongly that it is further relieved. “We expect the total rate reduction in FY26 to vary between 75-100 BPS, depending on how inflation and growth trends develop.” In general, with inflation under control and external risks – from geopolitical tension to potential trading dismay – the expenses believe that the RBI is likely to continue on its relief path through 2025. However, the extent and rate of cuts will be formed by the global economic uncertainties. As India positions itself for long-term growth amid short-term volatility, monetary policy seems to be the most important to drive economic resilience. Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions.