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📉 RBI Announces Jumbo Rate Cut to Stimulate Growth
In a bold monetary policy move, the Reserve Bank of India (RBI) has announced a significant repo rate cut, signaling its intent to stimulate economic activity amid slowing growth and manageable inflation levels.
The central bank also revised its policy stance to “accommodative”, opening the door for future rate cuts if needed.
🏦 Repo Rate Slashed to 6.00%
The repo rate—the rate at which the RBI lends to commercial banks—has been reduced by 50 basis points, bringing it down to 6.00%. This is one of the steepest cuts in recent years and reflects concerns over sluggish consumption, weak private investment, and global economic uncertainty.
📊 Policy Stance Turns Accommodative
Along with the rate cut, the RBI has changed its monetary policy stance from ‘neutral’ to ‘accommodative’, giving itself room to maintain or reduce interest rates in the future. This change is aimed at supporting broader economic expansion while keeping inflation within the target range.
📈 Reason Behind the Move
The central bank noted that despite moderation in inflation, growth indicators have weakened, requiring proactive steps to boost credit flow and consumer confidence. The decision was taken after analyzing:
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Softening retail inflation
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Weak industrial output
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Falling exports
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Muted rural demand
🧑💼 Governor’s Statement
RBI Governor Shaktikanta Das stated:
“The rate cut is timely and necessary. Our accommodative stance reflects our commitment to support the economy in these challenging times while ensuring financial stability.”
💼 Impact on Borrowers and Economy
The rate cut is expected to bring cheaper loans for homebuyers, businesses, and students. Banks may now lower their lending rates, making EMIs more affordable and boosting demand across sectors.
Sectors like real estate, MSMEs, and auto are expected to benefit the most from the move.
💹 Market Reaction and Forecast
The equity markets responded positively, with Sensex and Nifty climbing post-announcement. Economists forecast that the RBI may deliver one more cut in the upcoming policy meet if economic indicators remain weak.
