In a positive development, the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) has decided to cut repo rate by 50 basis points (bps) to 5.50%. This is third time in a row that MPC cut its repo rate. Also, MPC stance changed from 'accommodative' to 'neutral'. Moreover, Cash Reserve Ratio (CRR) cut by 100 bps to 3% from 4%.
The MPC has projected real GDP growth rate for this year 2025-26 at 6.5%; and it continue with earlier forecast of Q1 at 6.5%, Q2 at 6.7%, Q3 at 6.6% and Q4 at 6.3%.
FY26 CPI inflation seen at 3.70% against 4% earlier. Besides, Q1FY26 CPI inflation projection revised lower to 2.90% from 3.60% earlier; Q2FY26 CPI inflation projection revised lower to 3.40% from 3.90% earlier; Q3FY26 CPI inflation projection revised higher to 3.90% from 3.80% earlier; Q4FY26 CPI inflation projection unchanged at 4.40%.
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