The Reserve Bank of India (RBI) sees room to lower its key policy rate, the repo rate, in its December meeting. This comes as inflation is very low and the economy is growing steadily.
RBI Governor Sanjay Malhotra said recent data shows the central bank could consider a rate cut. Retail inflation rose just 0.25% in October, the lowest in years. Food prices are falling, and both manufacturing and services are showing growth.
Good rainfall this year has filled reservoirs, supporting crop sowing and keeping supply strong. The rupee has weakened slightly against the US dollar, but the RBI is focused on controlling volatility rather than targeting a specific level.
While the central bank sees space to cut rates, the final decision will be taken by the Monetary Policy Committee (MPC) in December. If rates are reduced, borrowing could become cheaper for businesses and individuals, supporting investment and economic growth.
Also Read: Google and Accel partner to boost India’s AI startups