FPJ News Service New Delhi

The Reserve Bank of India will cut interest rates at a second straight meeting on April 9, with just one more cut expected in August, which would mark the shortest easing cycle on record, a Reuters poll of economists found.

With inflation in India easing to a seven-month low of 3.61% in February and the economy forecast to grow at 6.4% this fiscal year, the weakest in four years, the central bank has room to cut rates further. A majority of economists, 54 of 60 in the March 18-27 Reuters poll, expected the RBI to cut its benchmark repo rate by 25 basis points to 6.00% at the conclusion of its April 7-9 meeting. One respondent predicted a 50 basis point cut, while the remaining five expected no change, Reuters report said.

“There are not many strong growth drivers going into fiscal year 2026...they (RBI) need to sustain their support to growth. Inflation has also created a lot of room for them to ease. So I think they should utilise that space and sort of recalibrate monetary policy,” said Dhiraj Nim, economist at ANZ. “They have injected liquidity, so that's covering some part of the liquidity deficit, that's good. But I think the rates also need to fall now because we have seen a palpable slowdown in consumption and investment and the real rates need to adjust from that perspective.”

The RBI has injected about $64 billion of rupees into the banking system over the last few months to increase money supply, which economists said was needed for rate cuts to work their way into the broader economy.