{"id":3722,"date":"2025-02-05T13:51:44","date_gmt":"2025-02-05T13:51:44","guid":{"rendered":"https:\/\/www.niftytrader.in\/nifty-demo\/?p=3722"},"modified":"2025-05-13T16:35:26","modified_gmt":"2025-05-13T11:05:26","slug":"rbi-likely-to-cut-rates-by-75-bps-beginning-with-25-bps-in-february-sbi-research","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/rbi-likely-to-cut-rates-by-75-bps-beginning-with-25-bps-in-february-sbi-research\/","title":{"rendered":"RBI Likely to Cut Rates by 75 bps, Beginning With 25 bps in February: SBI Research"},"content":{"rendered":"<h3><strong>Highlights:<\/strong><\/h3>\n<ul>\n<li><strong>SBI Research expects a cumulative 75-bps rate cut in 2025<\/strong><\/li>\n<li><strong>First 25-bps rate cut anticipated in February, followed by another in April<\/strong><\/li>\n<li><strong>Further easing may resume in October 2025 after a pause in June<\/strong><\/li>\n<li><strong>Rate cut expected to boost consumption, alongside tax relief measures<\/strong><\/li>\n<li><strong>RBI has maintained repo rate at 6.5% since April 2023<\/strong><\/li>\n<\/ul>\n<h2><strong>RBI May Initiate Rate Cut Cycle With 25 bps Reduction in February<\/strong><\/h2>\n<p>The <strong>Reserve Bank of India (RBI)<\/strong> is expected to <strong>cut its policy rate by 75 basis points (bps) over the upcoming easing cycle<\/strong>, starting with a <strong>25-bps cut in February 2025<\/strong>, according to a recent <strong>SBI Research report<\/strong>.<\/p>\n<p><em>&#8220;Cumulative rate cuts could be at least 75 bps, with two successive reductions in February and April 2025. After a pause in June, further rate cuts could begin in October 2025,&#8221;<\/em> the report stated.<\/p>\n<h3><strong>Factors Driving the Rate Cut Expectations<\/strong><\/h3>\n<p>Several factors have strengthened the case for a <strong>monetary policy easing<\/strong>:<\/p>\n<ul>\n<li><strong>Sluggish economic growth<\/strong><\/li>\n<li><strong>Government advance estimates indicating a slowdown<\/strong><\/li>\n<li><strong>Liquidity infusion measures undertaken by the RBI<\/strong><\/li>\n<\/ul>\n<p>On <strong>February 3, leading bankers and economists also projected a 25-bps rate cut in February<\/strong>, citing <strong>muted growth and the need for stimulus<\/strong>.<\/p>\n<h2><strong>Impact of Rate Cuts on Consumption and Growth<\/strong><\/h2>\n<p>A rate cut at this juncture could <strong>boost consumption demand<\/strong>, particularly when combined with the <strong>income tax relief<\/strong> announced in the <strong>Union Budget 2025<\/strong>.<\/p>\n<p>The <strong>Finance Minister increased the tax rebate limit to \u20b912.75 lakh per annum<\/strong> and raised the <strong>basic exemption limit from \u20b93 lakh to \u20b94 lakh<\/strong> under the new tax regime. Economists believe this additional disposable income, combined with lower interest rates, will <strong>spur spending and economic activity<\/strong>.<\/p>\n<h2><strong>RBI\u2019s Rate Trajectory: From Tightening to Potential Easing<\/strong><\/h2>\n<p>The <strong>RBI has kept its policy repo rate unchanged at 6.5% since April 2023<\/strong>, following a <strong>250-bps hike from May 2022 to February 2023<\/strong> to control inflation.<\/p>\n<p>During the <strong>December 2024 Monetary Policy Committee (MPC) meeting<\/strong>, the RBI <strong>held rates steady for the 11th consecutive time<\/strong>, signaling a commitment to aligning inflation with the <strong>4% medium-term target<\/strong>.<\/p>\n<p>However, the MPC <strong>shifted its stance from \u2018Withdrawal of Accommodation\u2019 to \u2018Neutral\u2019 in October 2024<\/strong>, indicating <strong>a readiness to adjust monetary policy<\/strong> in response to evolving economic conditions.<\/p>\n<p>The anticipated <strong>rate cut cycle, starting with a 25-bps reduction in February<\/strong>, is expected to <strong>stimulate demand and economic growth<\/strong>. With <strong>inflation under control and economic growth slowing<\/strong>, analysts predict that the <strong>RBI will prioritize monetary easing in 2025<\/strong>.<\/p>\n<p>The <strong>February 2025 MPC meeting will be closely watched<\/strong> for confirmation of this rate cut and its potential impact on India&#8217;s broader economic landscape.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Highlights: SBI Research expects a cumulative 75-bps rate cut in 2025 First 25-bps rate cut anticipated in February, followed by another in April Further easing may resume in October 2025 after a pause in June Rate cut expected to boost consumption, alongside tax relief measures RBI has maintained repo rate at 6.5% since April 2023 [&hellip;]<\/p>\n","protected":false},"author":1,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[41],"class_list":{"0":"post-3722","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":41,"user_id":1,"is_guest":0,"slug":"niftynews","display_name":"NiftyTrader","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/01\/Logo-1.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/01\/Logo-1.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/3722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=3722"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/3722\/revisions"}],"predecessor-version":[{"id":3724,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/3722\/revisions\/3724"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/3723"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=3722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=3722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=3722"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=3722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}