RBI Signals Rate Cuts as Morgan Stanley Predicts 5% Repo Rate by 2026
The Reserve Bank of India (RBI) is closely monitoring global economic conditions, particularly US interest rates and commodity prices, ahead of deciding on its rate cut pace. Meanwhile, Morgan Stanley predicts a rate cut cycle starting in late 2025, which could boost consumption and investment in India.
Two MPC members have hinted at a shift from a neutral stance to an accommodative one, suggesting room for rate cuts in the coming months. Morgan Stanley expects the repo rate to gradually decrease to 5% by the end of 2026, which would be the lowest in recent years. This could significantly boost credit demand in sectors like housing, automobiles, and infrastructure.
The RBI's decision comes as consumer price inflation trends lower, with global crude oil and food prices showing stability. Morgan Stanley anticipates the RBI could begin reducing interest rates as early as December 2025, following a potential Fed rate cut in the same months.
If the repo rate reaches 5%, it would provide a notable stimulus to economic growth, supporting consumption and investment. The RBI's close watch on global conditions ensures a balanced approach to monetary policy, aiming to ease inflationary pressures while fostering growth.
Read also:
- Revised Bonus Écologique Boosts French EV Market Share to 63.97%
- Ford Discontinues Popular Top-Seller in Staggering Shift, Labeled as a "Model T Event"
- 2025 Witnesses a 27% Surge in Worldwide Electric Vehicle Sales, Despite Opposition to Electrification Policies in the U.S.
- Summarized Report: Insights from the Realm of Transportation
