Overview

• BMI (Fitch Solutions) forecasts a 25-basis-point reduction to 5.25% in December, arguing inflation and growth will fall below the RBI’s projections.
• Bank of Baroda says sharply lower inflation expectations leave room for another cut, with GST rate reductions and festive spending expected to lift consumption.
• The policy repo rate stands at 5.5% after a 50-basis-point cut in June, and the MPC has kept a neutral stance and left rates unchanged in recent meetings.
• Governor Sanjay Malhotra has indicated limited space for further easing, and policymakers are monitoring tariff changes and GST effects on demand.
• BMI also sees yield differentials tilting toward the dollar and expects the rupee to soften toward ₹89.5 per USD by end-2025.