RBI Expected to Cut Rates by 0.25% Next Week

No image 5paisa Capital Ltd - 1 min read

Last Updated: 28th January 2026 - 12:52 pm

Summary:

Foreign brokerage forecasts RBI 0.25% repo rate cut on February 6 as final easing move with liquidity support amid stable inflation and growth outlook.

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The Reserve Bank of India is expected to reduce its repo rate by 0.25% on February 6, marking the final step in the easing cycle, which has also included substantial liquidity injections. As the economy slows down and inflation remains stable, the RBI recently injected over ₹2 lakh crore to improve the effectiveness of the transmission process. 

According to the latest foreign brokerage reports, continuous intervention in foreign exchange markets and volatile liquidity levels require the support of the central bank.

Liquidity Measures in Focus

Along with the anticipated rate cut, we should see further support for liquidity in the longer term. RBI thought it was prudent to inject additional liquidity to help stabilise the market.

The RBI sees the economy creating a more balanced environment than at the time of the last monetary policy meeting, which was conducted in December. High-frequency indicators support the resiliency of both the industrial and consumer sectors.

The RBI continues to draw comfort from these trends, notwithstanding all other complex issues surrounding monetary policy.

Inflation and Growth Outlook

Near-term inflation forecasts possibly lower the possibility of the RBI increasing the current GDP growth forecast on recently provided indicators. With the rupee weakening being of little influence on the forward rate path, dovish guidance is available as an alternative in the absence of a rate cut. Brokerage has projected stronger macro-operating conditions relatively, therefore complicating February's backdrop, with continued uncertainties in growth correlating with low-price pressures.

The central bank has been adapting to changing market dynamics, with the end of the easing cycle approaching and ongoing efforts to focus on sustainable economic growth and managing inflation.

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