By – Mr. Saurav Ghosh- Co-Founder of Jiraaf.
In a significant move, the Reserve Bank of India’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, has slashed the repo rate by 50 basis points to 5.50%, marking its third consecutive rate cut. This is a larger-than-expected reduction, accompanied by a shift in policy stance from ‘accommodative’ to ‘neutral.’
The RBI also cut the CRR by 100 bps to 3%, injecting Rs 2.5 lakh crore into the banking system in a phased manner. The move is aimed at boosting consumer spending by lowering borrowing costs across home, auto, and personal loans. However, savers are likely to earn less from fixed deposits and savings accounts.
Despite the aggressive rate cut, the RBI has retained its GDP growth forecast for FY26 at 6.5%, while revising inflation projections downward to 3.7%, citing a benign core and soft food inflation outlook. The rupee weakened to 85.95 against the dollar post-announcement.
Governor Malhotra acknowledged positive monsoon signals but flagged global uncertainty, slower trade, and emerging financial risks—especially from tech disruptions like AI—as key challenges ahead.’
– Your Life Coach