Core Viewpoint - The Reserve Bank of India (RBI) faces conflicting signals ahead of its monetary policy meeting, with market expectations on interest rate decisions showing significant divergence [1] Group 1: Economic Indicators - Current inflation remains below the target range, keeping real interest rates at elevated levels [1] - Strong economic growth recorded in the second quarter may strengthen the rationale for maintaining a tight monetary stance [1] Group 2: Interest Rate Expectations - DBS Bank's baseline expectation is for a "moderate rate cut," contingent on the inflation trajectory for FY2026 being 50 to 60 basis points lower than the RBI's current forecast and substantially returning to the target range of 2%–6% [1] - Recent volatility in the rupee exchange rate adds new uncertainty to the policy decision [1]