State Bank of India research reports state that they urged a 25-basis-point rate cut, claiming this is “the best possible option” for the RBI. However, some experts believe that the Central Bank’s rate-setting panel will likely opt for a status quo to announce its bi-monthly monetary policy on October 1.
RBI Governor Sanjay Malhotra, who heads the Monetary Policy Committee (MPC), has decided to initiate a three-day brainstorming session on the policy rate, commencing on Monday, in the backdrop of ongoing geopolitical tensions and the United States imposing a 50% tariff on Indian shipments.
Earlier, the RBI lowered the repo rate by 100 basis points in tranches starting in February 2025, as the Consumer Price Index (CPI) based inflation declined. However, the Central Bank opts for a status quo in its bi-monthly monetary policy, adopting a wait-and-see approach to assess the impact of US tariffs and other geopolitical developments on the Indian economy.
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The State Bank of India stated that there is “merit and rationale” for the RBI to lower the key benchmark lending rate by 25 basis points in the new policy review, as retail inflation is expected to stay benign even in Fiscal Year 2026.
