RBI MPC Meeting: Rate Cut Decision Tomorrow, Know Challenges Before Governor Sanjay Malhotra

RBI MPC Meeting April 2025: The RBI Monetary Policy Committee (RBI MPC) is conducting its three-day policy between April 7 and 9 to review the interest rates in the country. The comes against the backdrop of external economic challenges like tariff war and US recession risks, moderating inflation, and proposed changes in liquidity management. The MPC’s decision will be crucial in balancing growth and price stability amid global uncertainties. Here’s what’s expected on Wednesday and the challenges RBI Governor Sanjay Malhotra faces.

US Tariff Impact: The US imposed a 26% tariff on Indian imports. According to Bajaj Broking Research, this is expected to reduce India’s GDP growth for FY2025-26 by 20-40 basis points, potentially lowering it to around 6.1 per cent from the RBI’s earlier forecast of 6.7 per cent. This may push the RBI toward further rate cuts to counter economic strain.

US Recession Risks: Even as the US tariff war is going on globally, analysts expect America to slip into recession along with higher inflation. This poses risks to the global economy, including India.