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RBI’s 50 bps rate cut sparks short-term bond rally, long-term yields stay subdued. What to expect ahead?
RBI’s 50 bps rate cut sparks short-term bond rally, long-term yields stay subdued. What to expect ahead?
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RBI’s surprise 50 bps rate cut seen reviving real estate demand. Here's what it means for property investors
RBI’s surprise 50 bps rate cut seen reviving real estate demand. Here's what it means for property investors
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There is no new development as far as crypto is concerned; it does pose risk to financial stability: RBI Governor
There is no new development as far as crypto is concerned; it does pose risk to financial stability: RBI Governor
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The RBI has delivered a policy bonanza with the clear objective of hastening monetary transmission by the banking system and propelling growth. The RBI MPC announced a surprise 50bps cut in the policy repo rate to 5.50%, a completely unexpected 100bps rate cut in the Cash Reserve Ratio (CRR) from 2HFY26., yet accompanied by a shift in stance to neutral from accommodative. The outsized cut and guidance on liquidity are bold and clear signals for policy transmission to lower lending rates.
The RBI has delivered a policy bonanza with the clear objective of hastening monetary transmission by the banking system and propelling growth. The RBI MPC announced a surprise 50bps cut in the policy repo rate to 5.50%, a completely unexpected 100bps rate cut in the Cash Reserve Ratio (CRR) from 2HFY26., yet accompanied by a shift in stance to neutral from accommodative. The outsized cut and guidance on liquidity are bold and clear signals for policy transmission to lower lending rates.
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The RBI’s decision to reduce repo rate by 50 basis points to 5.50% and CRR by 100 basis points in 4 tranches indicates a strong and timely policy shift that aligns with balancing growth with price stability. The decision in CRR cut which is expected to release INR 2.5 lakh crore in primary liquidity, will ease credit conditions in the banking system. The pickup in non-gold imports and 14% increase in gross FDI also indicate robust domestic demand and global investor confidence in India’s structural strength.
The RBI’s decision to reduce repo rate by 50 basis points to 5.50% and CRR by 100 basis points in 4 tranches indicates a strong and timely policy shift that aligns with balancing growth with price stability. The decision in CRR cut which is expected to release INR 2.5 lakh crore in primary liquidity, will ease credit conditions in the banking system. The pickup in non-gold imports and 14% increase in gross FDI also indicate robust domestic demand and global investor confidence in India’s structural strength.
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The RBI's proactive approach to managing liquidity aims to ensure adequate credit flow to productive sectors, which is expected to significantly boost consumption and stimulate economic growth. Currently, inflation is below the RBI's target of 4%, with the outlook revised downward to 3.7% for the year. This shift will help balance the need for inflation control with the necessity to support economic growth.
The RBI's proactive approach to managing liquidity aims to ensure adequate credit flow to productive sectors, which is expected to significantly boost consumption and stimulate economic growth. Currently, inflation is below the RBI's target of 4%, with the outlook revised downward to 3.7% for the year. This shift will help balance the need for inflation control with the necessity to support economic growth.
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Bharti Hexacom shares drop 3% after Motilal Oswal downgrades to neutral, citing steep valuation premium
Bharti Hexacom shares drop 3% after Motilal Oswal downgrades to neutral, citing steep valuation premium
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The 50 basis point reduction in the repo rate, bringing it down to 5.5% is a surprise move, something that surpassed market expectations. I congratulate the Reserve Bank of India's MPC, under Governor Sanjay Malhotra, for this shot in the arm. It is exactly what India needs now to spur economic growth in the face of global uncertainties. However, the rate cut's impact hinges critically on how effectively banks and financial institutions pass them on to end borrowers. The transmission of rate cuts to retail and SME segments has remained a sticky point. Without stronger transmission mechanisms, the RBI’s monetary easing may not translate into actual credit growth or consumer spending. I am confident that the banks and financial institutions will rise up to the occasion and do their part for the country.
The 50 basis point reduction in the repo rate, bringing it down to 5.5% is a surprise move, something that surpassed market expectations. I congratulate the Reserve Bank of India's MPC, under Governor Sanjay Malhotra, for this shot in the arm. It is exactly what India needs now to spur economic growth in the face of global uncertainties. However, the rate cut's impact hinges critically on how effectively banks and financial institutions pass them on to end borrowers. The transmission of rate cuts to retail and SME segments has remained a sticky point. Without stronger transmission mechanisms, the RBI’s monetary easing may not translate into actual credit growth or consumer spending. I am confident that the banks and financial institutions will rise up to the occasion and do their part for the country.
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Even rain gods can’t stop smiling and neither can the markets. A bold 50 bps rate cut signals the RBI’s unwavering commitment to growth. With good macros backing it, RBI has actually shown the world that this isn’t just a policy — this is 'Policy making – A Make in India initiative' . I think the cage is open for the ‘emerging market’ bird to fly.
Even rain gods can’t stop smiling and neither can the markets. A bold 50 bps rate cut signals the RBI’s unwavering commitment to growth. With good macros backing it, RBI has actually shown the world that this isn’t just a policy — this is 'Policy making – A Make in India initiative' . I think the cage is open for the ‘emerging market’ bird to fly.
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The higher-than-expected 50bp rate cut decision by the MPC, though positive for growth is slightly negative from the market perspective for the near-term. This big rate cut is, as the RBI Governor remarked, front-loading of the rate cut. The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants. This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins.
The higher-than-expected 50bp rate cut decision by the MPC, though positive for growth is slightly negative from the market perspective for the near-term. This big rate cut is, as the RBI Governor remarked, front-loading of the rate cut. The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants. This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins.
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