Nifty Bank On Watch: RBI MPC To Deliver Rate Cut Verdict Amid Steep Fall In Inflation

Nifty Bank in Focus Ahead of RBI's Monetary Policy Committee Decision

The Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) is set to announce its verdict on interest rates on Friday at 10:00 a.m., with RBI Governor Sanjay Malhotra delivering the policy outcome.

Interest Rate Expectations

Economists remain split on whether the RBI will maintain its neutral stance or opt for a rate cut this time. The divergence stems from two contrasting data points: GDP growth surged 8.2% in the previous quarter, even as CPI inflation dropped to a multi-year low of 0.25% in October 2025.

• Cumulative Repo Rate Cut: The RBI trimmed the repo rate by a cumulative 100 basis points in three tranches beginning February, responding to the sustained decline in consumer price inflation.
• Rate Cut Expectations: Crisil Chief Economist Dharmakirti Joshi expects a 25-basis-point rate cut in December, noting that while growth remains strong, the steep fall in retail inflation in October has created additional room for easing.
• Neutral Stance: Bank of Baroda Economist Aditi Gupta believes the MPC is likely to keep the repo rate unchanged at 5.50% and maintain a neutral stance in the December meeting, citing strong GDP growth and easing inflation.

Data Points to Watch

• GDP Growth: The economy posted better-than-expected 8.2% GDP growth in the second quarter.
• Retail Inflation: Retail inflation has stayed below the mandated lower band of 2% for two consecutive months.

The RBI Governor had also indicated last month that there was scope for further reduction in policy interest rates, as the economy posted better-than-expected growth and retail inflation stayed below the mandated lower band.