Key Takeaways
- The RBI has cut the key rate by 25 basis points to stimulate economic growth and investment
- The decision is expected to boost economic growth and stimulate investment in the country
- The RBI’s move is intended to enhance market liquidity and support economic growth
New Delhi: The industry on Wednesday hailed the RBI’s decision to cut key rate by 25 basis points from 6.25 percent to 6 percent saying this will support economic growth amid the escalating global tariff war.
Shikhar Aggarwal, Chairman, BLS E-Services, said “The RBI has cut the repo rate by 25 basis points, reducing it from 6.5% to 6.25%. This reduction is expected to boost liquidity in the financial system, particularly aiding banks with lower Loan-to-Deposit Ratios. The move is intended to enhance market liquidity and support economic growth.
“During his presentation on the economic outlook for 2025-26, the RBI Governor emphasized the agriculture sector’s strong potential, backed by robust crop production. He also pointed out that upbeat business sentiment and rising rural demand, fueled by agricultural expansion, will further bolster economic growth,” he said adding at BLS E-Services, which collaborates with various public and private sector banks, we believe these monetary policy measures collectively aim to foster economic growth and ensure financial stability.
Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance, said “The Reserve Bank of India’s decision to reduce the repo rate by 25 basis points to 6% and adopt an accommodative stance reflects a strategic pivot to support economic growth amid the escalating global tariff war. This policy shift, effective immediately, adjusts the SDF rate to 5.75% and MSF rate to 6.25%, aiming to stimulate domestic investment and consumption as trade frictions erode export performance and global growth decelerates.”
With FY26 GDP growth projected at 6.5% and CPI inflation at 4%, the RBI anticipates a manageable balance, potentially aided by softer commodity prices. However, persistent external pressures could challenge these projections, necessitating vigilant oversight to mitigate inflationary risks while fostering resilience in key sectors such as real estate and infrastructure. Market sentiment remains positive, though the efficacy of these measures will depend on navigating the complex interplay of global trade dynamics, he said.
UGRO Capital CFO Kishora Lodha said this MPC policy appears to be a continuation of the various measures taken by the RBI over the last 4–5 months. Durable liquidity has been returning to the system over the past fortnight, thanks to these measures by the RBI. The change in stance to “accommodative” is consistent with this trend.
The rate cut is a welcome move that will help ease the high-interest-rate regime we have experienced over the past three years, although the transmission of this rate cut needs to be monitored, as banks are under pressure while passing on the benefits to all customer segments due to higher borrowing and operational costs, he added.
Anantharam Varayur, Co- Founder, Manasum Senior Living, commented the recent RBI rate cut and shift to an accommodative stance is a positive development for the real estate industry, especially for senior living projects. With lower interest rates, we can expect increased demand for housing, including senior living apartments. The RBI’s decision to cut the repo rate by 25 basis points to 6% and shift its stance to accommodative will provide a much-needed boost to the sector.
