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RBI Rate Cut in April: Ind-Ra Forecast

28 March 20251 min read
BANKING & FINANCERBI Rate Cut inApril: Ind-RaForecast28 March 2025safalsetu.com

Why in the news

Ind-Ra expects a 25 bps RBI policy rate cut in April.

Key facts

  • Meeting window: 7-9 April MPC.
  • Repo rate now 6.25%, following February’s 25 bps reduction, which ended a five-year gap.
  • FY26: up to three cuts (75 bps) possible.

Deciding factors

  • Core and food inflation.
  • Banking liquidity conditions.
  • Oil and raw material prices.

US tariff angle

  • 25% US tariffs on car and auto component imports start 2 April; slower exports could make RBI cut faster.

Implications

  • Cheaper loans may lift credit and investment; banking, real estate and auto may gain.
  • Mild pressure on the rupee is possible.

Exam angle

  • Terms: repo rate, bps, MPC, real repo rate (1.5% in FY26 scenario).

Test yourself

1. What repo rate prevailed after the February 2025 RBI cut, as cited in the Ind-Ra note?

The repo rate stood at 6.25%.

2. How many basis points of cuts did Ind-Ra project in total for FY26 at most?

Up to three cuts totalling 75 bps.

3. From 2 April, the US planned 25% tariffs on imports of which goods, as per the note?

The tariff covers car and auto component imports.

This topic is part of Daily Current Affairs 28 March 2025 (23 topics).

All topics of the dayDay quizMarch 2025

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