RBI's first MPC of FY26 begins today, spotlight on Governor Sanjay Malhotra's likely policy rate cut announcement

Apart from possible rate cut, the RBI MPC will also deliberate on measures related to liquidity

The Reserve Bank of India’s rate setting committee is set to convene its first meeting of the current financial year today. The six-member Monetary Policy Committee headed by Governor Sanjay Malhotra will deliberate on policy rate cut as well as liquidity measures.

The MPC comes at a time when the Indian economy has witnessed marked moderation in inflation in last couple of months. A poll of over 20 economists by Moneycontrol also predicted a 25-bps repo rate cut by the MPC on April 9. Similarly, a Reuters poll also made a similar forecast.

In the last MPC held in February, the central bank had slashed policy rate to 6.25 percent from 6.50 percent. The February rate cut was the first by the RBI in last five years. The repo rate is the interest rate at which the central bank lends to other banks in the country.

Amid the buzz around rate cut, the focus will also be on Poonam Gupta, the newly-appointed deputy governor. Gupta, an ex-World Bank economist, is the first woman deputy governor at the central bank in more than a decade. She is known for advocating the cause of lower rates in order to ease monetary policy.

In a financial year, the central bank conducts six bimonthly meetings that discuss and take decisions on issues such as interest rates, liquidity, inflation and GDP outlook among other things. After the April MPC, which will announce its decision on April 9, the next MPCs will be held in June, August, September, December and lastly February.