Rbi Rate Cut

In a surprising move, RBI Governor Sanjay Malhotra announced a 50 basis points rate cut, catching markets off guard. The unexpected policy shift aims to stimulate economic growth amid global uncertainties. Watch!

The cut will immediately benefit borrowers whose loans are linked to repo rate, but not those on MCLRDepositors to get lower FD rates; debt MF investors may not see NAVs going up like they usually do after a rate cut

RBI keeps key rate on hold after five straight cuts, raises inflation forecast, slashes projection for economic growthWith a no rate action, the repo rate—the rate at which banks borrow from it—remain unchanged at 5.15%

The consumer price index rose 3.99% from a year earlier in September, more than the 3.28% increase reported in August

Current growth slowdown is a combination of cyclical, durable and structural factors

The Reserve Bank of India (RBI) has lowered its policy repurchase rate by 25 basis points to 5.15%

A Bloomberg poll of 25 economists showed that a 25-basis-points cut to 5.15% in the repo rate is widely expectedBesides transmission of rates, MPC’s commentary on growth will also be important in the current day scenario

Retail prices rose at an annual rate of 3.3% in August, up from 3.15% in July and the highest since October 2018, the poll saidThe expected rise in inflation comes despite the price of oil, India's biggest import, falling by more than 7%

Currently, banks price their loans based on their marginal cost of funds-based lending rate (MCLR)In December, RBI said that banks must set their interest rates for new loans against an external benchmark beginning 1 April

Transmission of rates has been taking place and will continue to take place going forwardDeposit rates will fall at a slower pace as a result of competition against small savings rates, coupled with higher credit growth vis-a-vis deposit growth