RBI MPC Meeting April 2025: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is all set to announce its first policy decision for the financial year FY26 on Wednesday, April 9 at 10 AM. Led by RBI Governor Sanjay Malhotra, the committee will announce its decision on repo rate, liquidity conditions, as well as projections for CPI inflation and GDP growth for the Indian economy.
In its last policy meet in February, RBI reduced the repo rate by 25 basis points (bps) to 6.25 per cent to stimulate growth as inflation cooled. Analysts now expect the central bank to cut the repo rate by another 25 bps during its April meet.
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RBI MPC Meet: What Analysts Expect
Ankita Pathak, Macro Strategist and Global Equities Fund Advisor at Ionic Asset by Angel One, expects that the RBI is likely to lower rates by 25 bps in its ongoing meeting, with a shift towards an accommodative stance from the current neutral position. Pathak said that while India is in a relatively better position than other Asian countries in terms of tariffs, it is still expected to feel the impact of a global economic slowdown.
Pathak also said that China's response to Trump's tariffs will play an important role for central banks across Asia, including the RBI, as it will impact both currency movements and interest rate decisions. She cautioned that the ongoing trade war could potentially escalate into a currency war.
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For both inflation and GDP growth projections, she expects a downward revision. Pathak also said that India needed monetary support even before the tariffs, and now, with the added pressures, there’s an even stronger case for cutting rates and maintaining surplus liquidity.
According to a report by Bajaj Broking Research, economists widely expect the RBI to cut rates by another 25 bps to help support growth, especially given the recent global pressures.
One big factor affecting the economic outlook is the 26 per cent tariff the US has imposed on Indian imports. The firm said, these tariffs could shave off 20 to 40 bps from India's GDP growth for FY26, bringing it down from the RBI’s previous estimate of 6.7 per cent to around 6.1 per cent. This anticipated slowdown may prompt the RBI to consider additional interest rate cuts to mitigate the adverse effects on the economy, the firm added.
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How Is India’s Stock Market Expected To React
Ajit Mishra – SVP, Research, Religare Broking, said: "The market’s reaction will largely depend on the policy decision and the RBI’s forward guidance. Currently, the strength in banking and financial stocks suggests that a 25-bps rate cut is already being priced in. A deeper cut or a shift in policy stance would indicate a pivot towards growth support, which could spark buying interest across rate-sensitive sectors such as banking, financials, auto, and realty. Such a move would likely be interpreted as pro-growth, offering a supportive backdrop for the markets in the short to medium term.”
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However, Mishra noted that it will also be important to consider the RBI's stance on the global economy, especially considering the recent tariff-related developments. A cautious or hawkish tone could disrupt the ongoing recovery, so a hedged approach remains advisable at this juncture," Mishra said.
