RBI cuts rate by 25 bps, turns 'accommodative'
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CHEER FOR RETAIL BORROWERS RBI Cuts Rate by 25 bps Turns Accommodative with market expectations paving Snips fiscal s growth the way for lenders to immediate- ly reduce end-user borrowing Central Bank Speak outlook citing events costs for home and car purchases Inflation forecastHGrowth forecastF retail loans typically pegged to I snowballing around the external benchmark Simultaneously RBI lowered US tariffs as a worry this fiscal year s growth and infla- 01 tion projections by 20 basis points Q2 to 6 5 and 4 respectively ci- Our Bureau ting the tariffs that were suppo- 03 3 8 3 8 6 5 6 6 sed to come in- Q4 4 2 4 4 6 5 6 3 Mumbai The Reserve Bank of to effect from Fzn India RBI on Wednesday lowe- Wednesday on red policy rates by a quarter per- Indian exports centage point for the second time to the US 4 in as many months and surprised NEW POLICY One basis po- the markets with a stance switch RATE SET BY int is a hund- to accommodative from neut- CENTRAL BANK redth of a per- HOW MUCH MORE CAN RBI LOWER RATES ral to signal an easing bias centage point It also marginally reduced the The downward revision in I am Sanjay but I am not Sanjay of Mahabharat to be FY26 economic expansion fore- growth essentially reflects the able to foresee that far I do not have that divine vision cast on concerns that tariffs-trig- impact of global trade and policy But we will jointly try to manage growth and inflation gered global challenges could ha- uncertainties said Sanjay Mal- SANJAY MALHOTRA Wicitufror ve a disproportionately adverse hotra governor of RBI announ- impact on growth than on prices cing the second successive rate cut The central bank s rate-setting after tak ing charge last December committee unanimously voted to lower the policy rate to 6 in line Downward Direction of Rates ¦•¦ 3 Downward Direction of Rates centage point to end at 73 847 The cen- PP From Page 1 tral bank also issued draft norms on ea Malhotra said inflation is giving com- lending gold loans partial credit enhan- fort and confidence but growth is lower cement mechanisms and securitisation than what we aspire for adding that ta- of stressed loans riff s dampen growth I tinting that ta- Earlier announcing the policy measu- riffs will impact growth more than infla- res he stated that a change in stance tion the governor said While global from neutral to accommodative means trade and policy uncertainties shall im- that going forward absent any shocks pede growth its impact on domestic in- the MPC is considering only two options flation requiring us to be vigilant is not - status quo or a rate cut expected to be of major concern RBI Justifying the decision to cut rates he said the change in its stance implies the stated that the IVLPC s ben ign inflation out- direction of policy rates is downward look and moderate demand emphasise although Malhotra declined to predict a the need to help boost growth Reacting to floor in the current cycle of easing that the policy measures K Balasubramani- began in February an chief executive Citi India banking head Indian subcontinent said Given TOO FAR OUT the slight downward revision of GDP fo- Where it will reach we do not know I recast and easing inflationary pressures am Sanjay but I am not the Sanjay of the the rate cut should help in addressing the Mahabharata to be able to foresee that concerns around growth help equity and far the governor said I do not have debt markets financial and infrastructu- that divine vision but we will jointly try re sectors and provide optimism for the to manage the growth and inflation Re- economy dealing with apprehensions sponding to the policy measures the 10- around the US tariff hike year bond yields closed at 6 49 against 6 47• the previous day while the rupee GROWTH CHALLENGES closed at a three-week low at 86 68 per According to Pranjul Bhandari chief dollar versus 86 23 the previous day The economist India and Indonesia at BSE Sensex lost 379 points or half a per- HSBC RBI is supportive of growth