KEY HIGHLIGHTS
- RBI MPC verdict to be announced today at 10 AM by Governor Sanjay Malhotra.
- Experts divided: some expect a 0.25% repo rate cut, others see rates staying steady.
- Market reaction may swing sharply based on the RBI’s stance on growth, inflation & rupee.
All eyes are on the RBI this morning.
In a few hours, Governor Sanjay Malhotra will reveal whether the repo rate gets a cut or stays exactly where it is.
The buzz is strong because inflation has cooled, GDP growth is soaring, and the rupee recently crossed ₹90 per dollar, creating mixed signals for policymakers.
Quick Market Context (Why Today Matters)
Since February, RBI has already cut rates by 1% in three phases.
But for the last two reviews, the rate stayed unchanged at 5.5%.
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Many analysts believe there’s enough room for a 0.25% cut, especially with inflation well below the 4% target band.
RBI to announce MPC decision today
| Factor | Current Status | Impact on Today’s Decision |
|---|---|---|
| Repo Rate | 5.5% | Market expects 5.25% after cut |
| Retail Inflation | Falling; near comfort zone | Favourable for rate cut |
| GDP Growth | Higher than expected | Could push RBI to stay cautious |
| Rupee vs Dollar | Weak; crossed ₹90 | Rate cut may weaken rupee more |
| Bond Yields | Stable | Dovish stance may soften yields |
| Expert Consensus | Split 50–50 | Decision unpredictable |
What the RBI Said Earlier
Last month, Governor Malhotra clearly hinted that more rate cuts are possible.
With inflation behaving nicely and growth strong, he suggested there’s breathing room for policy adjustments.
Plus, the government still wants inflation to stay close to 4%, with a ±2% margin.
Early numbers from the current financial year show strong GDP performance, so the RBI may also revise its growth forecast upwards.
When & Where to Watch the MPC Outcome
The policy announcement goes live at:
🕙 Time: Today, 5 December, 10 AM
📺 Watch Live: RBI’s official YouTube channel
📱 Updates: Dainik Jagran Business and other financial portals
What Experts Are Predicting Today
Brokerage firm JM Financial expects:
- GDP growth forecast for FY26 to be raised to 7%
- Inflation forecast lowered to 2.2%
But here’s the twist:
A rate cut might support growth, yet it could also push the rupee into deeper weakness.
That’s why many believe RBI may play it safe — keep rates steady, but offer mild guidance for future easing.
Why the Decision Is So Tricky Today
Despite low inflation, three things are making RBI cautious:
- Rupee weakness — already at a record low
- Very fast economic growth — overheating risk
- Tariff pressures — need room for future action
Some experts now say the chances of a rate cut have dimmed and the RBI may shift into a rate stability phase.
Still, market probability remains:
0.25% cut → repo at 5.25%
How the Market May React
If RBI Cuts Rates Today
Experts believe this will spark an instant positive reaction.
- Real estate, auto, and banking stocks may see a jump
- Investor confidence may rise
- Cheaper credit means better corporate margins
A 25 bps cut = mild rally
A 50 bps cut = strong rally
If RBI Keeps Rates Steady
Surprisingly, this may not hurt the markets.
Analysts say:
- Holding rates signals confidence in the economy
- Banks maintain healthy spreads
- Markets may trade range-bound but stable
- Quality stocks could outperform
- Sentiment-driven stocks may lose steam
In simple terms:
Both outcomes favour stability — but the intensity of the rally depends on RBI’s tone.
Frequently Asked Questions
1. What is the expected repo rate after today’s meeting?
Most market participants expect a 0.25% cut, bringing the rate to 5.25%, but the decision is not guaranteed.
2. Will a rate cut make loans cheaper immediately?
Yes, rate-sensitive loans like home, auto, and business loans may become cheaper over the next few weeks as banks adjust their lending rates.
3. Will the stock market react sharply?
A cut usually triggers a rally, but even a status quo may not hurt markets because growth signals remain strong.
