New Delhi, Dec. 5 -- The Reserve Bank of India's (RBI) credit policy announced on Friday did come as a surprise. The policy repo rate was cut to 5.25% from 5.5%. This cut was ostensibly to support economic growth, which is quite strong today but was found to require a prop nonetheless.

With benign conditions on inflation expected to continue throughout the fiscal year, another rate cut looks likely in February. This is so because inflation will still be low at 0.6% in the third quarter of 2025-26, which will be the reference point for the next policy review.

Also, while GDP growth for the third quarter will not be known, the RBI forecast is 7%, which is lower than the 8.2% achieved in the second quarter. There can hence still be a justi...