The Bank of the Reserve of India (RBI) reduced interest rates at 50 basic points (BPS) on Friday, the third consecutive reduction, to 5.5%.
The RBI’s decision to reduce the reference rate through a “bold” 50 basic points will lead to lower interest rates and greater credit access for borrowers, INDIA INC said on Friday, stating that the movement supports economic growth in global head winds.
However, they commented that when its posture neutral from the accusation returns, the Central Bank has indicated that it can now stop evaluating the complete transmission of the cuts, before considering greater flexibility of interest rates.
The Bank of the Reserve of India (RBI) reduced interest rates at 50 basic points (BP) on Friday, the third consecutive reduction, to 5.5 percent.
The Central Bank has also unexpectedly reduced the cash reserve ratio (CRR) for banks per 100 basic basic points, which will unlock ₹ 2.5 Lakh Crore Liquidity to the banking system for loans to productive sectors of the economy.
Harsha Vardhan Agawal, president of Ficti, said: “Ficci welcomes RBI’s bold and proactive movement to reduce the repo rate.
“This front -loaded tariff cut sends a strong signal of the RBI commitment to support growth, especially at a time when the Indian economy is browsing multiple winds against commercial uncertainties and geopolitical aggregation,” accumulated volatility.
George Alexander Muffoot, MD of Mushot Finance, said: “For the NBFC, this is an encouraging movement, since it creates an environment favored to lower costs of indebtedness and an extensible credit to the communities of less service.”
“The measure, together with a reduced inflation perspective, is likely to support national consumption and stimulate credit demand in the next quarters. In general, we see this as a timely and positive intervention that can support a stronger credit cycle in fiscal year 26”.
Ranen Banerjee, partner and leader – Economic advice in PWC India, said that the relief of the policy rate, combined with the increase in liquuidity for banks when the system liquefiness is already comfortable, it is likely to add a second engine to the growth of consumption is that the anticipatchatcat cuts enter into force in FY26.
“With inflation under control, support growth is the main objective, especially taking into account uncertainty in global trade. The RBI continues with the growth of FY26 in 6.5 by center, but clearly sees a formation of necessity. This. This. This. This. This. This. This. This. This. This. This. This. This. This.
Rahul Goswami, CIO and MD – India Fixed Income in Franklin Templeton, said the bold movement of the RBI has surprised the markets and underline a clear pivot that supports growth in the midst of a moderate economic impulse and relieve inflation. ”
Upasna Bhardwaj, chief economist of Kotak Mahindra Bank, said: “The repo higher than expected rate comes along with a change in the posture of return to Neutral. This clearly points to the future decisors to be MoretiTentes, Givertendens.
Gura Senguta – Chief economist of IDFC First Bank, said: “The frontal load of the fees of fees plus the cut indicates that the approach is to improve the transmission of monetary policy. The neutral posture indicates that the bar for an additional speed is not even more.
The decision of the RBI MPC will support the growth of India in the midst of global continuous, Hemant Jain, president of PHDCCI.
With the last reduction, the RBI has reduced interest rates in 100 basic points in 2025, starting with a reduction of a quarterfinal in February, the first cut since May 2020, and another similar cut in April.
The rate cut occurs when the Indian economy slowed to a minimum of four years of 6.5 percent in the fiscal year that ended March. RBI projected that the economy grew to the same extent in the current financial year that began on April 1, since the increase in commercial tensions after the tariff policies of the president of the United States, Donald Trump, provides a wind against.
The Central Bank reduced its 3.7 percent inflation projection by 2025-26 4 percent before.
