New Delhi, Jan. 6 -- The Reserve Bank of India still has room for a further 50 basis points (bps) cut in policy rates in 2026, following bumper rate cuts of 125 bps in 2025, according to a report by IIFL Capital.

The report highlighted that the gap between the repo rate and core CPI inflation remains elevated, providing space for additional monetary easing. The delta between the repo rate and core CPI is currently at 2.8 percentage points, compared to an average of 1.1 percentage points over the last seven years, indicating scope for further rate cuts in India.

It stated "There is room for more cuts (50bps), given that repo minus core inflation is well above its historical avg., and inflation is low".

The report added that monetary eas...