Global financial services firm Jefferies said on Friday that the weakening of the US dollar has created room for the Reserve Bank of India (RBI) to lower its interest rates by up to 75 basis points (bps) by the end of calendar year 2025. According to the report, similar trends can be seen in other emerging markets such as Indonesia.
India has been witnessing a deflationary trend for some time, with Consumer price inflation averaging 4.6 percent last financial year and falling to 3.2 % this April, the lowest since July. The falling inflation signals further monetary easing by the central bank in the coming days.
RBI governor Sanjay Malhotra has cut the repo rate by 50 basis points since taking charge of the central bank in December. The Reserve Bank of India (RBI), during its April Monetary Policy Committee (MPC) meeting, cut the repo rate by 25 basis points, bringing it down from 6.25 per cent to 6 per cent.
According to the report, Malhotra seems more open to lowering interest rates to support growth, rather than keeping them high to fight inflation. With inflation already low, investors believe that Malhotra might cut rates even more in the future, making them positive towards the market.
Falling inflation and stable global currency trends could help India’s economy grow faster and make it easier for businesses to invest.
In its latest annual report, the Reserve Bank of India (RBI) has estimated that average inflation for the current financial year, ending in March 2026 (FY26), will be around 4 per cent.
India has been witnessing a deflationary trend for some time, with Consumer price inflation averaging 4.6 percent last financial year and falling to 3.2 % this April, the lowest since July. The falling inflation signals further monetary easing by the central bank in the coming days.
RBI governor Sanjay Malhotra has cut the repo rate by 50 basis points since taking charge of the central bank in December. The Reserve Bank of India (RBI), during its April Monetary Policy Committee (MPC) meeting, cut the repo rate by 25 basis points, bringing it down from 6.25 per cent to 6 per cent.
According to the report, Malhotra seems more open to lowering interest rates to support growth, rather than keeping them high to fight inflation. With inflation already low, investors believe that Malhotra might cut rates even more in the future, making them positive towards the market.
Falling inflation and stable global currency trends could help India’s economy grow faster and make it easier for businesses to invest.
In its latest annual report, the Reserve Bank of India (RBI) has estimated that average inflation for the current financial year, ending in March 2026 (FY26), will be around 4 per cent.
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