RBI Rate Cut: Boosting Growth Amidst Global Economic Optimism
The Reserve Bank of India's decision to lower the policy rate by 50 basis points aims to accelerate growth, improve liquidity, and support credit flow as inflation eases. The move has been positively received by markets, aligning with a global trend of cautious optimism among central banks.
- Country:
- India
In a decisive move to stimulate economic growth, the Reserve Bank of India (RBI) has slashed the policy rate by 50 basis points, signaling a robust pro-growth strategy. This reduction aims to alleviate price pressures, enhance liquidity, and bolster credit flow, according to a report by Bank of Baroda.
Market reactions have been favorable, with expectations for amplified economic activity in the upcoming quarters. The Monetary Policy Committee (MPC) has maintained a steady GDP growth forecast of 6.5 percent for FY26, while revising the inflation projection downward to 3.7 percent, showcasing confidence in India's stable macroeconomic environment.
The policy repo rate under the Liquidity Adjustment Facility has been reduced to 5.5%, consequently adjusting the Standing Deposit Facility Rate to 5.25% and the Marginal Standing Facility Rate to 5.75%. The report anticipates focus shifting to the US Federal Reserve's strategy amid strong labor market signals.
(With inputs from agencies.)
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