NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Narendra Modi
    Amit Shah
    Box Office Collection
    Bharatiya Janata Party (BJP)
    OTT releases
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout

    India
    Business
    World
    Politics
    Sports
    Technology
    Entertainment
    Auto
    Lifestyle
    Inspirational
    Career
    Bengaluru
    Delhi
    Mumbai

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
    Home / News / Business News / RBI may cut interest rates to 5.5% by 2025-end: Report
    Next Article
    RBI may cut interest rates to 5.5% by 2025-end: Report
    Falling inflation and slow growth to dictate RBI's rate decision

    RBI may cut interest rates to 5.5% by 2025-end: Report

    By Akash Pandey
    Apr 07, 2025
    03:55 pm

    What's the story

    Indian economists foresee a possible cut in the Reserve Bank of India (RBI)'s repo rate to 5.5% before 2025 ends—a level not seen since August 2022, as per CNBC-TV18.

    This is due to falling inflation and slow economic growth.

    "The way MPC will probably look at it is that from a risk minimization perspective, the downside risk to growth is much higher than the upside risk to inflation," Samiran Chakraborty, Chief Economist for India at Citi, said.

    Economic indicators

    Inflation and economic growth as determining factors

    Historically, central banks cut interest rates when inflation is low or growth is slow.

    However, high inflation has made it difficult for any central bank to go for such cuts.

    Since September 2019, India's monthly retail inflation has remained above the RBI's comfort level of 4%, except on three occasions, one of which was in February 2025.

    Impact

    RBI's potential repo rate cut: A boon for Indian industry

    With inflation likely to stay under control for a few months, the RBI could have enough dry power to help Indian industries with cheaper loans during tough times.

    Recent trends in Manufacturing Purchasing Managers' Index (PMI) indicate that the Indian industry was the strongest among all major Asian economies in the past few months.

    If these rate cuts materialize, translating into cheaper loans, it could help keep this momentum going.

    Liquidity issue

    Intervention amid liquidity crisis

    India's lending was affected for months due to a prolonged liquidity squeeze, which restricted banks' capacity to extend new loans at reasonable interest rates.

    The RBI stepped in January by purchasing dollars from the market and pumping more domestic currency into the system.

    Sonal Varma, Managing Director and Chief Economist for India and Asia ex-Japan at Nomura, sees this as an effective change in monetary policy stance.

    Future meetings

    Upcoming meeting and repo rate cut

    After its Monetary Policy Committee (MPC) meeting from April 7-9, the RBI is expected to announce a 25 basis points (bps) cut in the repo rate to 6%, a Mint poll of economists found.

    Barclays Bank economists did not rule out even a 35-bps cut.

    This would be the second consecutive reduction in the repo rate after February 7, when it was first reduced by 25 bps since May 2020.

    Facebook
    Whatsapp
    Twitter
    Linkedin
    Related News
    Latest
    Inflation
    Reserve Bank Of India (RBI)

    Latest

    Guess Nayanthara's fee for upcoming film with Chiranjeevi  Chiranjeevi
    How Barcelona dominated Real Madrid in 2024-25 season across competitions? Real Madrid
    Arsenal stage stunning comeback to draw 2-2 against Liverpool: Stats Trent Alexander-Arnold
    Gujarat Titans train in Ahmedabad as IPL waits for resumption Gujarat Titans

    Inflation

    Gold prices skyrocket in 2024: Will trend continue in 2025? Business
    India's manufacturing activity hits 12-month low in December 2024 Indian Economy
    Rural poverty in India falls below 5% for first time Indian Economy
    You'll need to pay more for a Rolex—blame gold prices! Business

    Reserve Bank Of India (RBI)

    RBI second-largest gold buyer in 2024, added 73-tons to reserves Business
    How RBI's new 15-day credit reporting rule impacts loan borrowers Business
    Rupee on autopilot? RBI considers hands-off approach to manage currency Indian Rupee (INR)
    India's retail inflation moderates to 5.22% in December Inflation
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2025