RBI To Cut Interest Rates Three Times in 2025?

RBI To Cut Interest Rates: The Reserve Bank of India (RBI) might reduce interest rates three times this year, according to Citi Bank economists. They say that the Indian economy could be affected by the tariffs imposed by the United States. To handle this, the RBI could cut rates by 75 basis points over the year. Citi Bank also expects a total rate cut of up to 100 basis points in 2025.

Citi’s forecast is in line with other major institutions like JP Morgan and Nomura. Samiran Chakraborty, Chief Economist for India at Citi mentioned in a report that the 27% US tariff could reduce India’s GDP growth by 40 basis points in the financial year 2025-26.

In February, the RBI already reduced the repo rate by 25 basis points. Now experts believe another 75 basis points cut may happen in the coming months depending on inflation and global economic trends.

One of the main concerns is that the tariffs may weaken global trade and reduce demand for Indian exports. This situation could also increase uncertainty in the global economy and hurt private investments.

According to the RBI’s earlier forecast, India’s economy is expected to grow by 6.7% in the current financial year. The inflation rate is likely to average 4.2%. These numbers give the RBI some room to lower interest rates further.

The next RBI Monetary Policy Committee meeting is scheduled for April 9, and experts believe there’s a possibility of another 25 basis point cut in that meeting.