The Reserve Bank of India (RBI) has surprised markets by reducing the repo rate by 50 basis points to 5.5%, marking its third rate cut in 2025. The Monetary Policy Committee (MPC) also cut the Cash Reserve Ratio (CRR) by 100 basis points, shifting its stance from ‘accommodative’ to ‘neutral’.
🔴 Key Takeaways:
- Lower borrowing costs expected to boost consumption, real estate, and private investment.
- Economists see this as a frontloaded easing cycle, with 100bps cut over four months.
- Inflation forecast revised to 3.7% for FY26, down from 4%.
- Stock markets rebounded, with Nifty and Sensex recovering after initial losses.
📢 Expert Opinions:
- Rahul Goswami, Franklin Templeton: “The RBI’s bold 50bps cut underscores a clear pivot towards supporting growth amid subdued economic momentum.”
- Radhika Rao, DBS Bank: “The MPC surprised markets by frontloading policy easing measures, adding a liquidity boost via the CRR cut.”
- Upasna Bhardwaj, Kotak Mahindra Bank: “The higher-than-expected rate cut signals future decisions will be more data-dependent.”
⚠️ Market Impact:
- Home loan EMIs expected to drop, improving affordability.
- Auto and real estate sectors likely to benefit, with increased demand.
- Banks may face margin pressure, but liquidity boost could help.
👉 What do you think? Will this move accelerate India’s economic recovery? Drop your thoughts in the comments!
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