The Monetary Policy Committee’s decision to cut the policy repo rate by 25 basis points to 6.25%—its first reduction in five years—looked more like a tactical tweak than the start of an easing cycle. Global uncertainties kept the central bank from shifting to an accommodative stance, a necessary step for deeper cuts.A deep easing cycle is unlikely. One or two more cuts, at best, may follow this year. The Federal Reserve’s stop-start moves have unsettled global capital flows, making it riskier for India to commit to extended rate cuts. The RBI may tread carefully—sharp Fed pivots could weaken the rupee and stoke inflation.
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