Another 25 bps rate cut best possible option for RBI: SBI study
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Dated:- 22-9-2025
PTI
New Delhi, Sep 22 (PTI) A SBI study released on Monday stated that there is merit and rationale for the Reserve Bank to reduce the key benchmark lending rate by 25 basis points in the forthcoming monetary policy, as retail inflation is expected to remain benign even in the next financial year.
The Reserve Bank of India (RBI) has already reduced the repo rate by 100 basis points since February, amidst declining consumer price index (CPI) based inflation. After reducing the repo rate three times in a row, the RBI hit a pause button in August.
The Reserve Bank Governor-headed Monetary Policy Committee (MPC), which decides on the interest r
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ign even in FY27, and without a GST cut, it is tracking below 2 per cent in September and October,” it said.
The report said the CPI for fiscal 2026-27 numbers are now tracking around 4 per cent or less, with GST rationalisation, October CPI could be closer to 1.1 per cent, the lowest since 2004.
“A rate cut in September is the best possible option for RBI, which also projects it as a forward-looking central bank,' the SBI study said.
The report, authored by Soumya Kanti Ghosh, Group Chief Economic Advisor of SBI, expects the CPI inflation may further decline by 65-75 bps due to the huge GST rationalisation.
Experience of 2019 also indicates that the rates rationalisation (primarily focused on reducing rates for common goods to 18 p
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