Moreover, I am in favour of retaining the neutral stance which gives the requisite flexibility to remain data-dependent and act according to the evolving macroeconomic conditions and outlook,” Malhotra said voting for the rate cut. The Q3 inflation projection is 0.6% compared to 1.8% earlier, and Q4 projected at 2.9% compared to 4%, and retail inflation for Q1 of the next fiscal is seen at 3.9% compared to 4.5% projected earlier, and RBI Q2FY27 at 4%. Malhotra also noted that receding inflation pressures, although above targets in some advanced economies, open up the scope for more accommodative policies in the ensuing months. External member Ram Singh however warned of the impact of rate cut on the already pressured rupee saying “a rate cut can add to the pressure on the rupee. This suggests that the current exchange rate pressures and FPI flows are likely to be self-limiting.”

Source: Indian Express December 19, 2025 15:34 UTC