Rate cuts News

India faces key economic decisions in August: RBI may cut rates amid low inflation; GST Council plans to revise tax slabs and compensation cess; stalled India-US trade talks risk 26 percent tariffs from August 1; exports slow, but inflation falls to a six-year low, with strong growth forecast for 2025–26.  

Both the rural and urban segments of the economy are witnessing softening of CPI inflation, with 2.92 per cent and 3.36 per cent in April in comparison to 5.43 per cent and 4.11 per cent, respectively in April.

India's CPI inflation fell to a 7-month low of 3.6 per cent in February 2025 due to a substantial decline in food and beverage prices.

Market turned more decisive as the Sensex Monday jumped over 377 points -- its biggest single-day gain in about a month -- and the NSE Nifty scaled the 8,700 mark in anticipation of a rate reduction at the RBI policy meet tomorrow.

Passage of the long-pending GST bill, lower interest rates and a bounce-back in the foreign portfolio investments, as also a stable rupee and good monsoons, figure high on the New Year wishlist of Dalal Street to help it regain the 30,000-point milestone.

RBI will consider slashing repo rate by 0.25 percent in its upcoming policy meet, irrespective of a rate hike by US Federal Reserve, Ind-Ra said Monday.

"The best person in India today to decide (on rate cuts) is the present Governor of RBI... He knows better than the government, he wants to control inflation," Bajaj Auto Chairman said.

Bankers have said there is more room to cut deposit rates which can help bring down lending rates, but fear that competing savings instruments like PPF and tax-free bonds will limit their ability.

An assurance to this effect was given by the bank chiefs at a meeting where their financial performance and other parameters, including transmission of the RBI rate cuts, were reviewed, Jaitley told reporters after the meeting.

Ahead of the RBI's monetary policy review, the government on Saturday "strongly" pushed for interest rate cut saying availability of affordable credit was necessary to boost manufacturing.

Asserting that the radical steps taken by Modi government has provided macroeconomic stability in the past one year, Union Minister of state for Finance Jayant Sinha on Tuesday expressed hope that RBI will cut interest rates in its upcoming monetary policy review.

As many as 70 banks, including 23 public sector lenders, have not passed on the benefits to their consumers from RBI's two rate cuts so far in 2015.

Three members of a seven-person committee advising the Reserve Bank of India (RBI) on monetary policy recommended a cut in interest rates at its policy review earlier this month, with one suggesting easing by 0.75%, according to a summary of the recommendations released on Wednesday.

The Reserve Bank is likely to cut policy rates by 50 basis points starting from the second quarter of 2015, as base effects for industrial production and inflation normalise over the coming months, a report says.