Monetary Policy Decision: RBI Governor Malhotra announces policy interest rates at 10 a.m.

The central bank said Reserve Bank of India Governor Sanjay Malhotra will announce the first bimonth monetary policy for the fiscal year (April 9, 2025), due to expectations of a 25 basis point reduction in short-term loan ratio.

The RBI Monetary Policy Committee (MPC), led by Governor Malhotra, began a three-day credit policy review on Monday (April 7, 2025).

In February, MPC cut the repo rate by 25 basis points to 6.25%. This is the first decrease since May 2020 and the first revision in two and a half years.

Experts believe that the Reserve Bank of India will lower it by another 25 basis points on Wednesday (April 9, 2025) against the backdrop of regulating inflation, and stimulate demand for growth as Trump poses a serious challenge to the global economy.

“RBI Governor @GovSmalhotra’s monetary policy statement is at 10:00 AM (April 9),” the Reserve Bank of India said in an article on social media platform ‘X’.

U.S. President Donald Trump announced on Wednesday (April 9, 2025) that India’s reciprocity tariff rate is as high as 26%.

Coincidentally, the MPC decision will be announced on Wednesday (April 9, 2025) that the day when the reciprocity tariffs begin.

“We expect the Reserve Bank of India to reduce the repurchase rate by 25 barrels in April, increasing the repurchase rate to 6%. We also expect it to discuss/implement steps to help maintain liquidity at the surplus level. We believe that the growth and inflation rate of surplus will lower the forecast for April, we expect to reduce the rate by 25bp per year, the rate by 5 May per year, and the rate by 5 June, and the rate by 5 June. Neutral estimates.”

Goldman Sachs is also expected to reduce its buyback rate by 25 basis points.

It said that the restraint of domestic activity in the first quarter was based on high-frequency data, benign inflation and a sharp pullback in the Brent crude oil and the DXY index (Dollar Index). Postal President Trump’s tariff announcement provided a favorable environment for the RBI.

A Goldman Sachs report said: “…our expectations for the title inflation rate of CY25 in the fourth quarter were below 4%, and we added 50 basis points to the repo rate reduction in CY25, slashing a total of 100 barrels in this cycle.”

Biz2Credit and Biz2x CEO and co-founder Rohit Arora believes that expectations for slowing down speeds may be timely in loose domestic inflation and supportive CPI inflation printing.

However, the evolving global context, especially new tariff risks and differences in interest rates with the United States, has introduced fresh complexity into policy calculations.

Umesh Gowda HA, chairman and founder of real estate developer Sanjeevini Group, said the impact of Trump tariffs on global growth will be felt as trade in major economies affecting global growth slows.

“In this issue, as India’s inflation rate is falling, the Reserve Bank of India must lower interest rates by 50 basis points to stimulate investments to enable businesses to invest in capital expenditures and meet global demand. On the domestic front, lowering interest rates will promote consumer demand across sectors and help global uncertainty drive consumer demand.”

Ashok Kapur, chairman of Krishna Group and Krisumi Corporation, said the central bank is expected to further support the economy and borrowers by lowering policy interest rates by 25 basis points at the upcoming monetary policy review meeting.

“This expected reduction rate will not only inject more liquidity into the market, but will also stimulate borrowing and spending, leading to increased economic activity. The housing sector in particular will benefit greatly, as lower interest rates will further reduce home loans, thereby making home loans more funded and giving homes a larger affordable buyer,” Mr Kapur said.

Ankita Pathak, a macro strategist at Angel One and global equity fund adviser, also said that the Reserve Bank of India could lower its position by 25 basis points amid global uncertainty and expects changes in its position to be from the current neutral neutral.

In terms of tariffs, India is much better than the rest of Asia, but it is impossible to see any ripple effect of the global slowdown, she said.

“India needs monetary returns even before Trump’s tariffs and needs it to support growth and the ability to do so, so it has to be the most powerful. So it has to be maintained by cutting speed cuts and excess liquidity,” Patak said.

Zuperia Auto CEO Ayush Lohia believes that the upcoming RBI monetary policy is a critical moment for the economy and expects to take steps to boost growth and stimulate demand.

“For the EV sector, lower interest rates and increased liquidity will be a significant driving force, enabling consumers to adopt electric vehicles and drive growth in the industry,” Lohia said.

In addition to the governor, the MPC also has two senior central bank officials and three government-appointed individuals.