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trending-news-and-reviews-009389600-1738898627.jpegAs of February 7, 2025, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) is concluding its three-day meeting, with the policy announcement scheduled for 10:00 AM IST today. This meeting marks the first under the leadership of Governor Sanjay Malhotra, who assumed office in December 2024.

Anticipated Rate Cut:
Market analysts widely expect the RBI to reduce the repo rate by 25 basis points, bringing it down to 6.25%. This anticipated move aims to stimulate economic growth, which has recently
Economic Context:
India's annual GDP growth is projected to be 6.4% for the current fiscal year, marking the slowest pace in four years. This slowdown is attributed to weaker manufacturing output and a decline in corporate investments. In response, the government has introduced tax cuts to boost consumer spending and stimulate growth, while aiming to maintain fiscal discipline.
Inflation Trends:
Inflation remains above the RBI's target of 4%, but there are signs of easing. In December, retail inflation slowed to 5.22%, down from 5.48% in November, primarily due to a deceleration in food price increases. This moderation in inflation provides the central bank with some leeway to consider a rate cut.
Currency Considerations:
The Indian rupee has experienced depreciation against the US dollar, reaching record lows. This decline has raised concerns about imported inflation and has added complexity to the RBI's monetary policy decisions. The central bank has been actively managing liquidity and intervening in the foreign exchange market to stabilize the currency.
Looking Ahead:
Investors and market participants are keenly awaiting the RBI's policy announcement. A rate cut is expected to lower borrowing costs, encourage investment, and support economic growth. However, the central bank must balance these objectives against the risks of persistent inflation and currency volatility.
The outcome of today's meeting will provide critical insights into the RBI's policy direction under Governor Malhotra's leadership.

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