TaxTMI 
TaxTMI 
TaxTMI 
RBI may go for 25 bps rate cut as inflation likely to remain benign: SBI Research report
X X X X Extracts X X X X
X X X X Extracts X X X X
....BI may go for 25 bps rate cut as inflation likely to remain benign: SBI Research report<BR>GST<BR>Dated:- 28-9-2025<BR>PTI<BR>Mumbai, Sep 28 (PTI) A SBI research report has pitched for a 25 bps rate cut, saying it is the 'best possible option' for the RBI, though some other experts opined that the central bank's rate-setting panel may again opt for status quo in its bi-monthly policy to be announc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on October 1. Reserve Bank of India (RBI) Governor Sanjay Malhotra-headed Monetary Policy Committee (MPC) is scheduled to begin a three-day brainstorming on policy rate on Monday in the backdrop of the ongoing geopolitical tensions and the US imposing 50 per cent tariffs on Indian shipments. The decision will be announced on October 1 (Wednesday). The RBI reduced the key short-term lending r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate (repo) by 100 basis points in three tranches beginning in February, amidst declining consumer price index (CPI) based inflation. However, the central bank opted for a status quo in the August bi-monthly monetary policy, taking a wait-and-watch approach to assess the impact of US tariffs and other geopolitical developments on the domestic economy. The SBI study stated that there is merit and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... rationale for the RBI to reduce the key benchmark lending rate by 25 basis points in the forthcoming monetary policy, as retail inflation is expected to remain benign even in the next financial year. On expectations from the MPC, Madan Sabnavis, Chief Economist at Bank of Baroda said: "While we do believe that there is limited scope for any change in the repo rate in this policy, there is a mar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ket view that given the current environment, a rate cut would be warranted." He further said that, as inflation is anyway well below the target of 4 per cent both before and after GST 2.0, this cannot be a primary consideration. Also, growth is expected to steady and be upwards of 6.5 per cent for the year and hence there is no imminent threat to this number even after taking into account the tar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iff effect. "Under these conditions, we expect a status quo. A change of stance could probably be considered to assuage sentiment and bond yields. If at all, at a later point in time, there is a package for exporters against the backdrop of tariffs, a rate cut could be considered," Sabnavis said. Aditi Nayar, Chief Economist, ICRA, said the GST rationalisation could dampen the headline CPI prin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts by 25-50 bps during Q3 FY2026 - Q2 FY2027 relative to ICRA's pre-GST rationalisation estimates, taking the average for FY2026 to about 2.6 per cent. While October-November 2025 may mark a fresh low for the CPI inflation, the trajectory subsequently remains upward sloping. "GST rationalisation is unambiguously set to moderate inflation. However, this is the outcome of a policy change and will ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....likely be accompanied by stronger demand. This suggests a status quo for the repo rate in the October 2025 policy review, in what appears to be a close call," she said. Effective September 22, Goods and Services Tax (GST) has become a two-tier structure of 5 per cent and 18 per cent. The earlier rates of 5, 12, 18, and 28 per cent have been clubbed into two rates of 5 per cent and 18 per cent, re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sulting in a reduced price of 99 per cent of daily use items. Dharmakirti Joshi, Chief Economist, Crisil Limited, said: "We expect that a repo rate cut could come as soon as October due to lower-than-expected inflation. Core inflation, which indicates excess demand pressure, remains low by historical standards despite the significant impact of rising gold prices." The rationalisation of GST ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tes will also likely contribute to reducing inflation further, he said. "Moreover, the recent decision by the US Federal Reserve to lower its funds rate by 25 basis points, along with an anticipated additional 50 basis points of cuts this year, provides the RBI's Monetary Policy Committee with some flexibility to make adjustments," Joshi said. Mandar Pitale, Head - Financial Markets, SBM Bank (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....India) Ltd said MPC is expected to maintain "status quo" on policy rate in forthcoming meeting waiting for the full impact of CRR cut to unfold and also for any further proactive fiscal measures from government. "In the near term, the baseline view thus remains that of prolonged pause with a small probability of residual rate cut in December MPC meeting depending upon the forward-looking growth i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nflation dynamics prevailing at that point," Pitale said. According to a study published in the RBI's latest Bulletin, the pass-through of the cumulative 100 bps reduction in the repo rate during February to August 2025 to lending and deposit rates has been robust. PTI NKD MR<BR> News - Press release - PIB....