Budget 2026 to Influence RBI's Rate Cut Pace: Fiscal Credibility Key
Budget
M
Moneycontrol•28-01-2026, 14:49
Budget 2026 to Influence RBI's Rate Cut Pace: Fiscal Credibility Key
- •Budget 2026 is crucial for macro policy, balancing public expenditure with fiscal credibility to support lower interest rates.
- •The RBI has already cut the repo rate four times, totaling 125 basis points, to 5.25 percent, with global monetary cycles also easing.
- •Economists believe a credible fiscal-deficit path and manageable borrowing program in the Budget can empower RBI to maintain growth-supportive monetary policy.
- •Experts suggest the Budget should align with monetary policy objectives, focusing on fiscal consolidation and capex-led growth.
- •India has more room for rate cuts compared to global peers, but the Budget's fiscal stance will dictate the speed of RBI's actions.
Why It Matters: Budget 2026's fiscal discipline is pivotal for accelerating RBI's future interest rate cuts.
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