The Reserve Bank’s rate-setting panel started its two-day deliberations on Wednesday, with markets carefully watching whether or not borrowing prices might fall additional amid supportive macro circumstances and enhancing sentiment.The six-member Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, began discussions on the subsequent set of bi-monthly rates of interest in opposition to the backdrop of a growth-focused Union Budget and announcement of an India-US commerce deal that lifted market sentiment. The policy outcome might be introduced on Friday morning.According to PTI, consultants are divided on the rate outlook. While some consider the central financial institution could go for another rate cut to decrease borrowing prices, others expect a pause after cumulative easing in latest months.A BofA Global Research notice mentioned the RBI’s rate-cutting cycle seems to be over for now. The notice added that the commerce deal might strengthen progress certainty and assist maintain momentum seen in high-frequency indicators.“We also believe the RBI is now done cutting rates but will continue to manage its liquidity provisions carefully to ensure rate transmission remains active,” the notice mentioned.Deepak Agrawal, CIO – Debt, Kotak Mahindra AMC, mentioned the upcoming policy comes amid a supportive home macro backdrop.“With inflation well below the target, growth momentum intact, surplus system liquidity, and fiscal consolidation reaffirmed, conditions favour policy stability. While global uncertainties remain, India’s relatively strong growth dynamics, improving external position, and record foreign exchange reserves provide the MPC with ample comfort to stay on pause,” Agrawal mentioned, PTI quoted.He added that easing tariff pressures and commerce developments might help the rupee and permit the RBI to handle sturdy liquidity circumstances.“Accordingly, the committee is expected to maintain the repo rate unchanged at 5.25 per cent; however, forward guidance is likely to remain mildly dovish, underscoring a data-dependent stance and preserving flexibility for recalibration should the growth-inflation trade-off evolve,” Agrawal mentioned.Lokanath Panda, COO, BLS E-Services, linked policy expectations to Budget 2026’s structural reform focus and infrastructure push.“Against this backdrop, the RBI’s MPC is likely to pause its rate cuts. Having already lowered the repo rate by 125 basis points since early 2025 with the last cut in December which helped the banks interest rates reduction and increased liquidity in the market, we expect the central bank is now poised to concentrate on liquidity conditions, bond market stability, and currency risk management,” Panda mentioned.The authorities has tasked the RBI with sustaining CPI-based retail inflation at 4 per cent, with a tolerance band of two per cent on both aspect. Inflation has remained beneath 4 per cent since February 2024 and stood at 1.33 per cent in December, whereas January knowledge is due later this month.Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, mentioned a steady rate atmosphere might help progress and housing demand.“At this juncture, a stable interest rate environment will play a key role in reinforcing buyer confidence, sustaining housing momentum, and supporting developers in driving new launches and job creation, thereby contributing meaningfully to overall economic growth,” Kapur mentioned.The MPC members additionally embrace Nagesh Kumar, Saugata Bhattacharya, Ram Singh, Poonam Gupta and Indranil Bhattacharyya.
