RBI Governor: Lower Real Rates Needed Amid Benign Inflation Outlook, MPC Cuts Repo Rate

• RBI Governor Sanjay Malhotra advocates for lower real interest rates, citing a benign headline and core inflation outlook.
• Malhotra noted minimal demand pressures, with core inflation projected to remain low for the next three quarters.
• RBI revised down inflation projections for FY26 (to 2%) and subsequent quarters, indicating a subdued price environment.
• MPC external member Ram Singh warned that delaying rate cuts could harm real GDP growth and extend the low-inflation phase.
• In its December policy, RBI cut the repo rate to 5.25% from 5.5% and maintained a 'Neutral' stance, with retail inflation remaining subdued.

Why It Matters: RBI Governor emphasizes lower real rates due to benign inflation; MPC cut repo rate to support growth.