Monetary Policy Review — RBI Eventually Cedes To Rate-Cut Demand, But Will It Work? Systematix' Analysis

A languid growth outlook portends that earnings growth for Indian companies may remain modest in FY26, the risk to growth is on the downside given the lack of solidity in RBI’s projections.

With the 25bp rate cut, Reserve Bank of India finally relented to the growing demand from quarters that saw the earlier 6.5% policy rate as “very stressful”.

(Source: NDTV Profit)

With the 25bp repo rate cut to 6.5%, RBI finally relented to the growing demand from the government that saw the central bank’s intransigence responsible for causing India’s growth drag.

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Systematix Research Report

With the 25bp rate cut, Reserve Bank of India finally relented to the growing demand from quarters that saw the earlier 6.5% policy rate as “very stressful”. It also relays the newfound perception that easing regulatory tightness will resuscitate growth.

In our view, banking on counter-cyclical accommodation to address structural growth impediments will likely be ineffectual.

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Systematix India Economy - RBI MPC Review.pdf
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Also Read: RBI Monetary Policy: Repo Rate Cut By 25 Basis Points To 6.25%

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