2025-02-07 02:36:30 pm | Source: SMC Global Securities Ltd
This move will be positive for the borrowers who have taken loans at floating interest rates as the banks will pass on the benefit of the rate cut to the borrowers. Also, auto loans, home loans, and personal loans are expected to see higher demand. The rate-sensitive sectors such as banking, consumer durables, real estate, and automobiles will benefit from this announcement as it can boost borrowing, spending, and investment. This can result in higher corporate earnings, and business expansion, foster job creation, and promote holistic economic growth.
PMI Manufacturing Future Output Index rose to 65.1 in January 2025 from 62.5 in December 2024 signifying a robust manufacturing sector. India’s CAD (Current Account Deficit) fell slightly to 1.2% of the GDP in Q2 of FY25 from 1.3% in Q2 of FY24 which might reduce the pressure on the rupee. Also, India’s forex reserves stand at $630.6 billion (as on January 31, 2025), providing great support to India’s external sector amidst global uncertainties.
Quote on RBI monetary policy announces 25 bps rate cut by Ajay Garg, CEO, SMC Global Securities Ltd
Below the Quote on RBI monetary policy announces 25 bps rate cut by Ajay Garg, CEO, SMC Global Securities Ltd
RBI has announced the repo rate cut of 25 bps to 6.25% from 6.50%. This cut was considered after India’s real GDP growth rate fell to 6.4% in FY25 from 8.2% in FY24 and it is expected to rise to 6.7% in FY26. After the favorable outlook on food prices and normal monsoon, the CPI inflation for FY25 is projected at 4.8% and it can further fall to 4.2% in FY26. RBI has maintained a neutral stance to keep a flexible approach to maintain a balance between inflation targets and economic growth.
This move will be positive for the borrowers who have taken loans at floating interest rates as the banks will pass on the benefit of the rate cut to the borrowers. Also, auto loans, home loans, and personal loans are expected to see higher demand. The rate-sensitive sectors such as banking, consumer durables, real estate, and automobiles will benefit from this announcement as it can boost borrowing, spending, and investment. This can result in higher corporate earnings, and business expansion, foster job creation, and promote holistic economic growth.
PMI Manufacturing Future Output Index rose to 65.1 in January 2025 from 62.5 in December 2024 signifying a robust manufacturing sector. India’s CAD (Current Account Deficit) fell slightly to 1.2% of the GDP in Q2 of FY25 from 1.3% in Q2 of FY24 which might reduce the pressure on the rupee. Also, India’s forex reserves stand at $630.6 billion (as on January 31, 2025), providing great support to India’s external sector amidst global uncertainties.
Above views are of the author and not of the website kindly read disclaimer
Disclaimer:
The content of this article is for informational purposes only and should not be considered financial or
investment advice. Investments in financial markets are subject to market risks, and past performance is
not indicative of future results. Readers are strongly advised to consult a licensed financial expert or
advisor for tailored advice before making any investment decisions. The data and information presented
in this article may not be accurate, comprehensive, or up-to-date. Readers should not rely solely on the
content of this article for any current or future financial references.
To Read Complete Disclaimer Click Here
Latest News
Petrol, diesel price reduction not feasible now: Har...
Continuous improvement has changed India's economic ...
Odisha Chief Minister hails MoU with Adani-IHC JV fo...
India's AI ambitions get boost from nearly $80 billi...
Punjab's litchi exported to Oman for 1st time: Piyus...
India's auto industry to maintain strong momentum in...
Indian Railways' freight loading rises 4 pc to 142.2...
India`s coal production up by 14.9 pc at 17.88 milli...
Sensex jumps 579 points, Nifty tops 24,175 as easing...
Government, industry discuss roadmap to strengthen I...
More News
Views on MPC Meeting by Mr. Marzban Irani, CIO of Fixed Income at LIC Mutual Fund
Views on RBI Monetary Policy by Mr Vimal Nadar, National Director & Head, Research at Colliers India
Quote on RBI MPC Announcement by Sandeep Agarwal, CEO & CIO, Modulus Alternatives
Quote on Real Estate Sector- RBI MPC's decision to Cut the Repo Rate by Mr. Pradeep Aggarwal, Founder & Chairman, Signature Glo...