The Reserve Bank of India (RBI) is anticipated to reduce interest rates for the first time in nearly five years on February 7, 2025, aiming to stimulate economic growth. The decision, which will be announced by the newly appointed Governor Sanjay Malhotra at 10:00 AM, is expected to have a significant impact on the Indian stock market and the global economy.
The Monetary Policy Committee (MPC) meeting, held from February 5 to February 7, concluded today. The MPC, consisting of three RBI members and three external members, is widely tipped to reduce the repo rate by 25 basis points to 6.25%, after keeping it unchanged for eleven straight meetings. This move is driven by easing price pressures, giving policymakers more room to maneuver.
The Indian stock market is expected to open flat on Friday, with traders adopting a cautious approach ahead of the RBI policy decision and the Delhi state election results. The Sensex and Nifty are expected to experience volatility based on the outcome of the meeting.
The potential rate cut is seen as a positive development for the Indian economy, which is experiencing sluggish growth. The move could boost investment and consumption, leading to an overall economic recovery. However, the global impact remains uncertain, as the decision comes amid mounting global uncertainties.
Source: Reuters, February 7, 2025