Last month, Governor Sanjay Malhotra said there was room for further cuts, though the threshold for easing remains high. The central bank is also expected to maintain its “neutral” policy stance, giving rate-setters some flexibility amid global uncertainty.

SBI’s Ghosh said there’s “no point” in holding off on rate cuts now as inflation will continue to stay below the RBI’s 4% target in this fiscal year and around the level next year. A front-loaded cut now would help boost festive-season spending and push credit growth, he said.

However, the central bank should pause once the repo rate dips to 5.25%, said Ghosh. The repo rate was at 5.15% just before the pandemic in February 2020, the lowest it had dipped till then. During the pandemic, the RBI drove down the key rate further to 4%, but 5.15% should remain the “rate floor” for ordinary times, he said.$BNB $ETH $BTC