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Nirmal Bang deputy head of research, economist John on RBI Policy
This story was originally published at 12:06 IST on 6 August 2025
Register to read our real-time news.Informist, Wednesday, Aug. 6, 2025
MUMBAI - Teresa John, deputy head of research & economist, Nirmal Bang Institutional Equities, said the following on the Reserve Bank of India's third bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Wednesday:
"In a unanimous decision, the RBI's MPC kept rates on hold largely in line with consensus expectations and against our expectation of a 25 bps rate cut as it waits for the transmission of past policy actions. The decision came despite a substantial cut in the CPI estimate to 3.1% citing higher inflation from 4QFY26 onwards along with core inflation expected to be ~ 4%.
The governor noted that domestic growth is holding up even though some high frequency indicators showed mixed signals in May and June. GDP growth has been retained at 6.5% for FY26 with Q1 at 6.5%, Q2 at 6.7%, Q3 at 6.6% and Q4 at 6.3% (all unchanged) and 1QFY27 at 6.6%.
CPI inflation has been revised down to 3.1% from 3.7% in FY26 with Q2 at 2.1% (3.40?rlier); Q3 at 3.1% ( earlier 3.9%) and Q4 at 4.4% (unchanged) and 1QFY27 at 4.9%. Core inflation is expected to be moderately above 4% in FY26.
We continue to see scope for rate cuts of at least 25 bps and up to 50 bps with continued downside risks to growth and inflation. Although the governor indicated that the RBI is looking beyond bank credit growth, the overall flow of credit including non-bank sources also remains relatively muted." End
Compiled by Rati Chaphekar
Filed by Akul Nishant Akhoury
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