RBI MPC meeting: Rate cut or pause? Here’s where to watch

Reserve Bank of India to Unveil Bi-Monthly Monetary Policy Decision

The Reserve Bank of India (RBI) will make its bi-monthly monetary policy decision on Friday, December 5, as RBI Governor Sanjay Malhotra is set to announce the outcome of the Monetary Policy Committee's (MPC) three-day meeting.

Key Factors Influencing the Decision

• easing inflation as the rupee has breached 90 against the dollar
• accelerating GDP growth
• persisting geopolitical uncertainties

RBI's Previous Moves and Expectations

The central bank has already cut the repo rate by 100 basis points this year, as CPI inflation trended lower. Governor Malhotra had indicated last month that there was “scope for further reduction.” India's retail inflation target remains 4% with a 2% tolerance band.

Forecasts and Projections

The RBI is also expected to upgrade its growth forecast after stronger-than-expected first-half numbers. In October, it had raised FY26 GDP growth projections to 6.8% from 6.5%.

Market Expectations

• HDFC Bank noted that growth has overshot, and inflation has undershot, and lingering risks on growth in H2 and inflation likely staying below 4% until Q3FY27 may still justify another 25 bps cut.
• SBI Research added that with strong GDP numbers and benign inflation, the RBI must clearly communicate its rate trajectory while maintaining a neutral stance.
• Crisil's Chief Economist Dharmakirti Joshi expects a 25-bps cut in December, citing a sharp drop in retail inflation — led largely by cooling food prices — and subdued fuel inflation. Core inflation (excluding gold) also eased to 2.6% in October.

Polls and Projections

A CNBC-TV18 poll indicates a slight tilt toward easing, with 60% of respondents expecting a 25-basis-point cut and 40% projecting a status quo.

• Among those expecting a cut, the outlook for the easing cycle remains split:
• 60% believe December will be the last cut.
• 30% see one more cut in February.
• 10% say the rate-cut cycle is already over.

RBI MPC Announcement Details

• The policy outcome will be announced on Friday, December 5 at 10 am by RBI Governor Sanjay Malhotra.
• The announcement will be streamed live on RBI's official YouTube channel.

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