RBI likely to cut repo rate by 25 bps in Dec amid low inflation, strong growth: Report
Kolkata (PTI): The RBI could announce a 25-basis point repo rate cut in its upcoming December monetary policy meeting, driven by a sharp decline in inflation and strong growth momentum, a report by credit rating agency CareEdge said on Tuesday.
It said inflation has eased to a decadal low of 0.3 per cent in October, well below the RBI's 4 per cent target threshold, creating policy space for rate cuts.
The current repo rate stands at 5.5 per cent.
"Factors such as stable Brent crude prices, healthy reservoir levels supporting rabi sowing, and muted price pressures arising from excess capacity in China should help prevent any sharp rise in inflation," the report stated.
While GDP growth has accelerated to 8.2 per cent in the second quarter of the 2025-26 fiscal, CareEdge projects a moderation to around 7 per cent in the second half of the financial year, as the boost from front-loaded exports fades and post-festival consumption moderates.
For the full fiscal, the report forecasts GDP growth at 7.5 per cent.
It said that with CPI inflation expected to average around 3.7 per cent over the next 12 months, the real policy rate at current levels would be roughly 1.8 per cent – above the estimated neutral range of 1-1.5 per cent – indicating scope for a rate cut.
Despite external headwinds, including prolonged trade negotiations with the US and geopolitical tensions, India's external sector remains resilient with foreign exchange reserves rising by USD 27 billion to USD 693 billion as of mid-November, it noted.
CareEdge expects the RBI to revise its FY’26 inflation projections to around 2.1 per cent and growth forecast to around 7.5 per cent in the December policy meeting.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Congress using hijab issue to pacify minority anger, alleges Karnataka LoP R Ashoka
Bengaluru: Leader of Opposition in the Assembly R. Ashoka has accused the Congress government of using the hijab issue to placate what he described as discontent among minority voters after the Davanagere by-election.
In a post on X on Wednesday, Ashoka alleged that the state government, instead of addressing issues such as price rise, corruption, farmers’ distress and law and order, was attempting to retain its minority vote base by reviving the hijab issue.
Referring to the 2022 dress code introduced by the BJP government, which prohibited hijab in schools and colleges, Ashoka said the Karnataka High Court had upheld the policy and emphasised the importance of discipline in educational institutions.
He questioned the Congress government’s move to revisit the issue and asked whether setting aside the court-backed policy to benefit one community could be described as secularism.
Ashoka further alleged that while the government was willing to permit hijab, it continued to prohibit saffron shawls.
He accused the government of dividing students on religious lines rather than treating schools and colleges as spaces of equality.
Drawing a comparison with Mamata Banerjee’s government in West Bengal, Ashoka claimed that excessive appeasement politics had harmed the state and warned that the Congress in Karnataka could face a similar political response.
He said voters in Karnataka would teach the Congress a lesson for what he termed “vote-bank politics” and for compromising constitutional and judicial principles.
