Anticipation Builds: Will the RBI's Next Move Spark Economic Growth?

With the Reserve Bank of India's Monetary Policy Committee convening in Mumbai, anticipation surrounds a potential decision to cut the repo rate by 25 basis points. Industry leaders across various sectors are optimistic about this move, expecting it to enhance growth while maintaining a check on inflation figures.

Experts argue that the current economic climate—characterized by controlled inflation and steady growth—provides the opportunity for a rate reduction. A 25 bps cut, reducing the repo rate from 6% to 5.75%, is seen as a step that could benefit both borrowers and lenders, boosting key sectors such as MSMEs, housing, and healthcare.

Suresh Darak of Bondbazaar supports this notion, believing the bond market could gain significantly should the RBI proceed with the rate cut, as it would lower interest rates and subsequently increase bond prices. Amit Suri of AUM Wealth advises borrowers to reassess repayment strategies as lowered EMIs improve cash flow over time. Despite these expectations, some, such as Pramod Kathuria of Easiloan, caution that higher rates could prevail if inflation and monsoon uncertainties persist.

(With inputs from agencies.)