Kolkata, Dec 2 (PTI) The RBI may announce a repo rate cut of 25 basis points in its upcoming December monetary policy meeting, driven by a sharp decline in inflation and strong growth momentum, a report by credit rating agency CareEdge said on Tuesday. It said inflation fell to a decade-low of 0.3 percent in October, well below the RBI’s target threshold of 4 percent, creating policy room for rate cuts. The current repo rate stands at 5.5 percent. “Factors such as stable Brent crude prices, healthy reservoir levels supporting rabi sowing, and subdued price pressures arising from excess capacity in China should help prevent any sharp rise in inflation,” the report said. While GDP growth accelerated to 8.2 percent in the second quarter of the 2025-26 fiscal, CareEdge forecasts a moderation to around 7 percent in the second half of the financial year, as the boost from pre-loaded exports fades and post-festive consumption moderates. For the full fiscal, the report forecasts GDP growth at 7.5 percent. It said that with CPI inflation expected to average around 3.7 percent over the next 12 months, the real policy rate at current levels would be around 1.8 percent – above the estimated neutral range of 1-1.5 percent – indicating room for a rate cut. Despite external headwinds, including protracted trade negotiations with the US and geopolitical tensions, India’s external sector remains resilient with foreign exchange reserves rising by USD 27 billion to USD 693 billion as of mid-November. CareEdge expects the RBI to revise its FY’26 inflation projections to around 2.1 percent and growth forecast to around 7.5 percent in the December policy meeting.