Sharp fall in inflation strengthens case for RBI to ease rates again

The MPC reduced the policy repo rate by 100 basis points this year, and its decision in the December meeting will depend largely on how it expects the inflation rate to evolve in the coming quarters

Market expectations for a policy interest-rate cut have increased, and several entities are reported to have postponed their fundraising plans in anticipation. Reserve Bank of India (RBI) Governor Sanjay Malhotra, in his remarks this week, has noted that the possibility of rate cuts, as indicated in the October meeting of the Monetary Policy Committee (MPC), remains intact. However, he also underlined that whether the committee decides to act in the upcoming meeting would depend on its assessment at that time. The next MPC meeting is scheduled for December 3-5. Inflation outcomes are also fuelling market expectations. The consumer