The Reserve Bank of India (RBI) has just concluded its latest Monetary Policy Committee (MPC) meeting on April 9, 2025, with a clear signal: growth is back in focus. Here are the key takeaways every investor should know:
Key Highlights:
1.
1. Repo Rate Cut – 6.00% and Counting
The RBI reduced the repo rate by 25 basis points to 6.00%,
marking its second cut this year. This move is aimed at easing borrowing costs
and supporting domestic demand amid global economic pressures.
2.
2. Policy Stance Turns "Accommodative"
A significant shift from 'neutral' to 'accommodative'
indicates the central bank’s willingness to further support the economy. This
could mean more rate cuts if inflation continues.
3.
3. Growth & Inflation Outlook Tweaked
- GDP Growth for FY2025-26 has been revised down to 6.5%
(from 6.7%) as the RBI factors in rising global uncertainties, including fresh
U.S. tariffs.
- Inflation expectations have eased, with the CPI forecast lowered to 4.0%
(from 4.2%), giving the RBI more room to maneuver.
4.
4. Liquidity Support Reinforced
Governor Sanjay Malhotra emphasized maintaining a liquidity
surplus of about 1% of total deposits—approximately ₹2 lakh crore. This
proactive move ensures smoother policy transmission and better access to
credit.
Impact on Markets:
Equity Markets:
Lower interest rates tend to be bullish for equities,
especially for rate-sensitive sectors such as banking, auto, and real estate.
Improved liquidity and a dovish policy stance also support overall investor
sentiment.
Debt Markets:
Bond prices may rise as yields fall due to the rate cut.
Debt investors should consider extending duration to benefit from potential
future rate cuts. However, corporate bond spreads must be monitored amid global
volatility.
Forex Markets:
Comments
Post a Comment