365telugu.com online news,New Delhi, January 28th, 2026: Following the presentation of the Union Budget on February 1, the common man may receive a significant financial relief from the Reserve Bank of India (RBI).
According to a report by BofA Securities (Bank of America), the central bank is expected to announce a 0.25% cut in the repo rate during its upcoming Monetary Policy Committee (MPC) meeting on February 6, 2026.
Key Highlights of the Prediction:
Rate Adjustment: Economists suggest that the RBI may lower the repo rate to 5.25% from the current levels.
Reasoning: The prediction is based on expectations of easing inflation and the need to support economic growth. The brokerage noted that the central bank might use the available policy space to stimulate the economy.
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Liquidity Support: Along with the rate cut, the RBI is expected to ensure adequate liquidity in the banking system to facilitate the effective transmission of lower rates to consumers.
Impact on Borrowers: If the RBI proceeds with this cut, commercial banks are likely to reduce interest rates on Home Loans, Car Loans, and Personal Loans, leading to lower EMIs for millions of borrowers.
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The report highlights that while the macro-operating environment has improved since December, market dynamics remain complex. BofA Securities noted that if the RBI decides to implement this cut, it might be the final reduction in the current easing cycle.
However, if they pause, the central bank is expected to maintain a “dovish guidance” to keep future options open.
Furthermore, while the Indian Rupee has faced some pressure, the brokerage believe it won’t be a major hurdle for the rate-cutting cycle. High-frequency data indicates resilience in the industrial and consumer sectors, which provides the RBI with some comfort in adjusting the policy stance.
With the Budget Session already underway in Parliament, all eyes are now on Finance Minister Nirmala Sitharaman’s February 1 announcements, followed closely by Governor Shaktikanta Das’s policy statement on February 6. A rate cut would serve as a double boost for the economy, aligning fiscal support with monetary easing.