In line with market expectations the RBI announced a 25 Bps Repo rate cut – this after nearly 5 years. Interesting takeaway was the need for considering “ flexible inflation targeting” , which will help balance infla
tion and growth. The stance however was retained at Neutral more due to potential risks from volatile global markets. GDP growth in FY’26 is estimated at 6.7%and average inflation at 4.2%. Expect RBI to remain vigilant and do what it takes to ensure adequate liquidity to support growth but also keeping an eye on inflation. Future action will depend on global headwinds and local macro-economic factors.
- Shanti Ekambaram, Deputy Managing Director, Kotak Mahindra Bank
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“The MPC’s decision to cut Repo rate by 25bp and maintain neutral stance is completely in line with our expectations. The softening growth and inflation outlook has provided room to monetary easing. Further from here , we expect the RBI will need to monitor liquidity conditions more closely to ensure liquidity stance remains in sync with the policy stance.”
- Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank
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“The Reserve Bank of India’s decision to reduce the repo rate by 25 basis points underlines its contribution in stimulating economic growth. The monetary policy decision will further support the Union Budget’s focus on boosting demand which will together reinforce growth and confidence in the economy. The RBI’s decision has come at an opportune time as India attempts to gets into it high growth trajectory as against the 6.4% of FY25.”
- Anu Aggarwal, Head of Corporate Banking, Kotak Mahindra Bank
