With the recent liquidity injection by the Reserve Bank of India (RBI) and rising market optimism, a decision by the RBI to cut interest rates could result in positive sentiment across sectors.

The new RBI Governor Sanjay Malhotra will announce the MPC's interest rate decision on Friday, February 7, 2025.

The MPC had changed its policy stance to neutral in October and cut banks' cash reserve ratio by 50 bps in December to ease liquidity stress in the banking system

As per Emkay Research, the Reserve Bank of India (RBI) may need to implement measures beyond rate cuts to enhance banking liquidity. Key suggestions include Open Market Operations of Rs 30,000 crore and easing liquidity norms.

The Reserve Bank of India (RBI) will have to look for additional measures other than a rate cut to infuse enough liquidity in the banking system according to a report by Emkay Research.Among other options suggested by Emkay Research,

The Reserve Bank of India is widely expected to cut interest rates for the first time in nearly five years. This is according to a Reuters survey of economists and analysts. Inflation in India has declined;