RBI Expected to Continue Rate Cuts in April, Says Bank of America

The Reserve Bank of India (RBI) is anticipated to proceed with another round of monetary easing during its April Monetary Policy Committee (MPC) meeting, according to a report by Bank of America (BofA) Global Research. The central bank is expected to reduce the repo rate by 25 basis points (bps), bringing it down to 6%, with projections indicating a further decline to 5.5% by the end of 2025.

BofA’s analysis suggests that the RBI’s decision is supported by stable economic growth, subdued inflationary pressures, and easing exchange rate concerns. Headline inflation is expected to remain below 4% in the coming months, providing the central bank with the flexibility to continue its rate-cutting trajectory.

The February MPC meeting marked the beginning of this easing cycle, with a 25 bps rate cut already implemented. BofA predicts that the RBI will maintain its focus on reviving growth momentum while ensuring inflation remains within the 2–6% tolerance range. The brokerage also highlighted the central bank’s commitment to liquidity support, with approximately ₹5 trillion injected into the banking system since December 2024.

However, uncertainties such as potential reciprocal tariffs and global economic headwinds could influence the RBI’s policy decisions. Despite these challenges, BofA remains optimistic about the central bank’s ability to balance growth and inflation effectively.

The upcoming MPC meeting, scheduled for April 7–9, will be closely watched by economists, businesses, and investors for further insights into the RBI’s monetary policy direction.

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