RBI Expected to Cut Repo Rate by 25 bps in April 9 Policy Meet: Poll

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is likely to reduce the repo rate by 25 basis points in its upcoming meeting on April 9, according to a Moneycontrol poll of 21 economists, fund managers, and treasury heads.

With Consumer Price Index (CPI) inflation trending lower, experts believe the central bank can shift focus to supporting economic growth amid persistent global uncertainties.

Growth-Focused Strategy May Drive Further Easing

According to CareEdge, the MPC is expected to continue its rate-cutting cycle which began in February, while maintaining a neutral stance:

“We expect the MPC's focus to shift from inflation to growth… with another 25 bps reduction in the repo rate during the April meeting.”

This anticipated cut follows the first repo rate cut in five years, introduced in the February policy review.

Liquidity Conditions Improve Slightly

Despite multiple liquidity measures, market liquidity remains in deficit, although this week showed signs of easing. Treasury officials note this has helped soften money market rates slightly.

Policy Stance: Neutral or Accommodative?

While a majority expect the RBI to retain its Neutral stance, allowing room to either cut or raise rates, some experts believe a shift to Accommodative may better support transmission:

“The stance is likely to be accommodative as this is essential for the smooth transmission of policy,” said Madhavankutty G, Chief Economist, Canara Bank.

All respondents anticipate a dovish tone, with reassurance on maintaining comfortable liquidity in the financial system.

Inflation Outlook May Be Slightly Revised Downward

Some economists expect minor adjustments to inflation forecasts:

FY25 CPI inflation may be revised down to 4.6% from 4.8%.

FY26 forecast of 4.2% could remain unchanged due to uncertainties around the monsoon and potential weather risks.

“We also see a downside risk to the FY26 estimate of 4.2 percent,” said Gaura Sen Gupta, Economist at IDFC First Bank.

Growth Forecast Expected to Remain Steady

Economists expect the RBI to maintain its current growth forecast of 6.7% for FY26, while highlighting downside risks due to global headwinds.

In February, the RBI projected:

FY26 GDP growth at 6.7%

Q1: 6.7% (revised from 6.9%)

Q2: 7.0% (down from 7.3%)

Q3 and Q4: 6.5% each

RBI Governor Sanjay Malhotra cited strong Rabi crop prospects and industrial recovery as key drivers for growth.

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