Nifty Bank On Watch: RBI MPC To Deliver Rate Cut Verdict Amid Steep Fall In Inflation

Nifty Bank will be in sharp focus ahead of the RBI’s Monetary Policy Committee decision, with the six-member panel set to announce its verdict on interest rates on Friday at 10:00 a.m. RBI Governor Sanjay Malhotra will deliver the policy outcome.

The central bank has held the repo rate steady at 5.5% for the last two meetings, but economists remain split on whether the RBI will maintain its neutral stance or opt for a rate cut this time. The divergence stems from two contrasting data points: GDP growth surged 8.2% in the previous quarter, even as CPI inflation dropped to a multi-year low of 0.25% in October 2025.

Earlier this year, the RBI trimmed the repo rate by a cumulative 100 basis points in three tranches beginning February, responding to the sustained decline in consumer price inflation.

Crisil Chief Economist Dharmakirti Joshi told PTI that he expects a 25-basis-point rate cut in December, noting that while growth remains strong, the steep fall in retail inflation in October has created additional room for easing. The RBI Governor had also indicated last month that there was scope for further reduction in policy interest rates.

Retail inflation has stayed below the mandated lower band of 2% for two consecutive months, even as the economy posted better-than-expected 8.2% GDP growth in the second quarter.

However, some experts argue the central bank may continue with a pause, given that economic momentum is being supported by fiscal consolidation, targeted public investment and reforms such as the GST rate cut.

Bank of Baroda Economist Aditi Gupta told PTI that the MPC is likely to keep the repo rate unchanged at 5.50% and maintain a neutral stance in the December meeting. Strong GDP growth and easing inflation give the RBI room to stay on hold as it monitors global uncertainties, she said.