India’s new central bank governor, Sanjay Malhotra, is expected to cut interest rates in his first policy meeting. This move aims to boost economic growth amid escalating global risks. Malhotra, who took charge in mid-December, is likely to shift from his predecessor’s hawkish stance, which kept rates unchanged for two years to target 4% inflation.
Economists predict a reduction in the benchmark repurchase rate by at least 25 basis points to 6.25%. Some analysts even suggest a possible 50 basis point cut. The new six-member monetary policy committee, chaired by Malhotra, includes three new external members.
Recent data showing a slower-than-expected economy and new tariff threats from the US have added to the reasons for a rate cut. This decision follows last week’s record $12 billion tax cuts in Prime Minister Narendra Modi’s annual budget.
