RBI's Accommodative Shift Signals More Rate Cuts Ahead

Reserve Bank of India's move to "accommodative" on April 9 has paved the way for more rate cuts, with 75–100 basis points reductions anticipated by FY26-end as economists try to counter global trade risks and provide a boost to growth. The repo rate was reduced by 25 bps to 6%, its second consecutive decline, as inflation eased to 4% and GDP growth estimates were lowered to 6.5% in FY26.

 

Key insights

 

Global worry: RBI Governor Sanjay Malhotra called U.S. tariff wars and supply chain hiccups headwinds, prompting liquidity infusion of ₹7 lakh crore since February.

 

Sector stimulus: Soft loans can help realty, autos, and infrastructure, but there is global uncertainty.

 

Relief from food inflation: Food inflation came down to a 21-month low of 3.8% in February, but monsoon risks persist.

 

Source: Business Standard