People’s savings are likely to increase in the coming months, as everyday expenses are already coming down. Now a report by SBI Research has predicted that loan installments may also come down. In fact, the process of reducing interest rates has started from last month itself.

According to official data released on Wednesday, retail inflation fell to 3.61% in February, the lowest level in seven months. According to the report, the repo rate is likely to be reduced twice by 0.25%-0.25% in April and June, while another cut of 0.25% may happen in October. The Reserve Bank may cut the repo rate by a total of 0.75% by October this year.

Inflation is expected to be less than 4% in January-March

According to the SBI Research report, inflation maybe 3.9% in the January-March quarter, which will be below the RBI’s target of 2-4%. Inflation is estimated to be 4.7% in the entire financial year 2023-24, while it may remain between 4.0-4.2% in the financial year 2025-26.

The main reason for the decline in retail inflation is the reduction in food prices. Last month, inflation in food and beverages came down to 3.84%. In particular, vegetable inflation came down to -1.07% for the first time in 20 months, that is, their prices have come down.

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Know why prices are rising

Inflation has come down at the domestic level, but inflation of imported goods has increased rapidly. It was 1.3% in June 2024, which increased 24 times to 31.1% by February 2025. The weakness of the rupee along with the increase in the prices of gold, silver, oil, and chemicals is believed to be the main reason for this.

According to the report, the decline in inflation rate, possible cut in interest rates and strong corporate performance are taking the Indian economy towards stability. However, some challenges may persist in the coming months due to global economic uncertainties and rising imported inflation.

Know how the common man will get relief

In February, the RBI cut the repo rate by 0.25% for the first time in five years, bringing it down to 6.25%. Earlier, the repo rate was reduced in May 2020, but later it was increased to 6.5%. Now if the estimates of the report prove to be correct, then the loan interest rates may come down further in the coming months, which will provide relief to the common people.

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